b \3 ~ 4.1). --= B $' %& M

. INDIAN

AGR1duL'rpRAL

RESEARCH INSTITUTE, NEW DELHI~

I;A. R. 1.6.

M:GIBC-Sl-6 ARj5!-7-7.54-1O,OOO.

JWanagement in Russian jndustry and .Agriculture GREGORY BIENSTOCK, SOLOMON M. SCHWARZ, and AARON YUGOW EDITED BY

ARTHUR FEILER and JACOB MARSCHAK

PUBLISllED FOR

:The Jnstitute of 1'Vorld ..Ajfairs of

'J'he J\lew School for Social Research CORNELL UNIVERSITY PRESS

Copyright 1944 by Oxford University Press, New York, Inc. First published, 1944 Second printing, September 1946

Copyright assigned 1948 to Cornell University Reissued, December 1948

t ~ Olh 1).

-------, ..---,----

Printed in the United States of America

Preface

T

HIS study is a product of the Research Project on Social and Economic Controls in Germany and Russia, conducted by the Graduate Faculty of Political and Social Science of the New School for Social Research, with the support of the Rockefeller Foundation. It appears as the first volume in a series of international studies published under the auspices of the Institute of World Affairs, established by the New School for Social Research. It is perhaps superfluous to state that none of the sponsoring institutions identifies itself with the views expressed in this book. The research method applied excludes even a joint responsibility of the authors. The work was instituted, and its scope delineated, by Arthur Feiler, whose death in the summer of 1942 deprived the collaborators of an invaluable guide and critic. A debt of gmcitude is due to Herbert Solow, who had tIle difficult task of translating part and editing all of the manuscript. ADOLPH LOWE

Executive Director of Research November 1943

Table of Contents Authors of the different chapters are indicated by initials: B, Gregory Bienstock; S, Solomon M. Schwarz; Y, Aaron Yugo'W.

PREFACE BY ADOLPH

No'rn

LoWE, v

ON TERMINOLOGY AND CITATIONS,

INTRODUCTION BY JACOB MARSCl-IAK, PART

ix

xiii

1. MANAGEMENT IN INDUSTRY

I. ORGANS OF INDusrlUAL MANAGEMENT (B)

o. Development and Structure, 3 b. Plant Management vs. Higher Organs of State Industry, 8

c. Plant Manager and Assistants, II.

Il

INDUSTRIAL MANAGEMENT AND THE COMMUNIST PARTY

a. The Communist Party in Economic Control (ll), 17 h. Party Guidance in Practice (B), l:l. c. The Background (8), z6

III.

MANAGEMENT AND EMPLOYEES

o. Trade Unions in the Plant (S) I 3" h. Hiring Labor (S), 38

c. Fixing Wages and Labor Conditions (8), 40 d. Workers' 'Production Conferences' (B), 44 IV. TI-IE PLANNING OF INDUSTIl.IAL PRODUCTION

a. h. c. d. e.

(B)

The Gosl?lan, 47 Intermediate Planning Organs, 49 Regional Planning, 51 Plant Planning, 53 From Plan to Reality, 55

V. PROCUREMENT AND SALE (B)

a. Organization, 58 h. The Role of Management in Procurement and Sale, c. Critical Voices, 6~ vii

6~

TABLE OF CONTENTS

Vlll

VI.

(Y) a. Output and Measurement of Success I. Quantity, 66 2. Quality, 68 b. Cost I. 'Business accountability,' 69 2. The chief accountant, 70 3. Planned and actual costs, 71 4. Cost reduction, 72 5. Overhead and sinking funds, 77 c. Profits, 78 d. Indirect Taxation as the Main PI'ice Factor, 82-

OUTPUT, CoST,. PROFIT, PRICE

VII. 'CONTROL BY TIm ROUELl!.' (Y), 87

VIlI.

(B) a. Advancement and Remuneration, 91 b. Intangibles, 95

INCENTIVES

IX. PLANT MANAGERS

(S)

a. Origins, 104 b. Social Types, 113 c. Later Developments, 119 PART

X.

II. MANAGEMENT OF COLLECTIVE FARMS (Y)

THE KOLKHOZ:

A

NEW PRODUCTION FORM,

XI. CoNSTITUTION AND ADMINISTRATION,

XII.

ORGANIZATION OF WORK,

1'].7

140

148

XIII.

RELATION TO GOVERNMENT AND OU-fER ORGANIZATIONS,

XIV.

PLANNING AND ACCOUNUNG,

XV.

158

INCOMES AND INCENTIVES

a. Income, 163 h. Intangible Incentives, 169

XVI. XVII.

PRlVATE VS. CO-OVJ.i;MTlVE INTERESTS,

I7z

KOLKHOZ OFFICIALS: SELECTION AND STATUS,

179

APPENDIXES GLOSSARY OF RUSSIAN WORDS AND PHRASES, TITLES OF RUSSIAN PERIODICALS,

INDEX, 189

187

185

152

Note on Termi11010gy and Citations

T

RANSLITERATION in this book is according to the system used by the New York Public Library, with slight modifications. For an understanding of Russian terms, it will be useful to consult the Glossary from time to time. General practice has been to use exact or approximate English equivalents, citing the Russian term 011 the :first occasion. When it is impossible to render the meaning in English exactly or succinctly, we adhere to the Russian, dispensing with italics after the first use. Some terms require special elucidation. Plant: To denote the basic unit of industrial production in Russia, the State-owned and -controlled counterpart of the American 'firm' or 'concern,' the word 'plant' (occasionally 'factory,' 'mill,' 'shipyard,' etc.) is used. As far as possible, literal translation of predpriyatiye, enterprise, has been avoided; it is heavy, unfamiliar, and, with its connotations of the free and enterprising entrepreneur, misleading. 'Plant' is rather loose, colloquial, and non-committal, and has, on the whole, physical rather than social connotations. The reader will do well, however, to remember that the premises of what we call a plant may be widely scattered (e.g. a railroad). The term plant seems to work fairly well in a non-legal study. Control: This word conveys in Russian (as in French and German) a much smaller degree of interference, domination, and au~ thority than in English: it is best rendered, in the majority of cases, by 'supervision' or, less frequently, by 'inspection' or by be

x

NOTE ON TERMINOLOGY AND CITATIONS

'comptrollership.' Throughout this book, control has been used in the broader English sense, as in 'one-man control' (yedinonatc!:Jaliye; see Glossary), except in the case of a specific Soviet slogan describing supervision of industry by State banks, i.e. 'Control by the Rouble' (Chapter VII). Territorial Divisions: The Union of Soviet Socialist Republics consisted in 1940 of sixteen constituent Republics (soyuzny ye respubliki-union Republics). Some include in their territory smaller units, in many respects autonomous, each inhabited by a compact national minority. These are the 'autonomous [national] Republics.' The less autonomous subdivisions of the constituent Republics we call 'provinces,' as a general equivalent of the official oblast', the krai (certain outlying areas), the autonomous national oblast', and the somewhat smaller pre-revolutionary gztberniya. For still smaller territorial units we use the general term 'district,' as an equivalent of raion, okrug, and (pre-revolutionary) uyezd. The administration of districts and of individual cities and villages we call local, reserving the term regional (and region) for higher administrative levels, i.e. provinces, autonomous Republics, and constituent Republics. Congresses of the Communist Party of the Soviet Union, the supreme Party organ, represent Party members directly and are, according to Party statutes, supposed to convene triennially. AllUnion Party conferences are supposed to convene not less than annually in intervals between Congresses to discuss urgent Party problems. Conference delegates are elected not by Party members but by the Party's regional, provincia~ and Republic committees. The Congresses chiefly referred to in this book are as follows: 8th: 9th:

~arch

1919

~arch-April

1920

loth: ~arch 1921 I 1th: ~arch-April nth: April 1923 13th: ~ay 1924

1922

14th : 15th : 16th: 17 th : 18th:

December 1925 J)ecer.nber 1927 June-July 1930 January-February 1934 March 1939

NOTE ON TERMINOLOGY AND CITATIONS

Xl

Capital letters are used in this book somewhat more generally than is standard English language practice. The deviation aims at assisting the reader to bear constantly in mind certain special connotations which, in any discussion of the Soviet regime, should attach to commonplace words. Thus, the words Party and State, whenever they apply to the Communist Party or the Soviet State, are capitalized in order to emphasize that in the U.S.S.R. the relation of these institutions to economic life is fundamentally different from any comparable relationship in Great Britain Or the United States. Soviet economic life is ruled by the Soviet State, the Soviet State in turn by the Communist Party of the Soviet Union. Likewise, the word Plan has been capitalized whenever the reference is to the overall llational PInn. The object is to distinguish sharply this comprehensive instrument, something quite alien to Western experience, from plans familiar to the Westerner but far more limited geographically, technically, or otherwise. There have been three such overall Plans, each of five years' duration. The period of the first was to have been from I October 1928 to 30 September 1933; it was declared finished on 31 December 1932. The next two periods were 1933-7 and I938-4z, both inclusive.

Titles of Russian books are quoted in English translation, as are titles of newspapers and magazines, except when their Russian names are well known. Titles of articles are given only in cases of large magazines, and only in English. For magazines, bulletins, and newspapers, the Russian titles are presented at the end of the book, under the heading Titles of Russian Periodicals, in a list alphabetized according to the English translation. Laws and Ordinances: Official Soviet collection, Sobraniye Zakono'lJ i Rasporyazhenii. Pravitel'stva Soyuza Sotzilllisticheskikh Sovietskikh RespubUk (after 1938, Sobraniye Postanovlenii i Rasporyazhenii, etc.). Cited with reference to the year and cur-

..

xu

NOTE ON TERMINOLOGY AND CITATIONS

rent number of the law or ordinance. For example, Laws and Ordinances, 1938:286. Party Congress: Official stenographic reports of Congresses of the Communist Party of the U.S.S.R. For example, 18th Party Congress, p. 654. Decisions: Decisions of Communist Party organs. Cited from the official collection, Vsesoyuz,naya Kom:munisticheskaya Partiya v Rezolyutziyakh S'yezdov, !(on!erentzii i Plenumorv Tzentral'no go Komiteta (The Communist Party of the U.S.S.R. in Resolutions of Party Congresses, Conferences and Plenary Sessions of the Central Committee), 6th edition, 2 vols. (Moscow, 1940). For example, Decisions, I: 452.

Introduction By

T

JACOB MARSCHAK

o

study Russia today is to measure the strength of an allimportant factor in war and peace. To take this measure is also to contribute to the age-old discussion whether, at what tasks, and under what circumstances, honor-seeking officials are more or less efficient than profit-seeldng businessmen; whether and when fear of degradation and punishment is a more or less powerful deterrent than fear of financial loss; to what extent economic initiative may be effectively centralized or decentralized. These are questions limited by no geographical boundaries. Several excellent studies have tried to give answers by describing and measuring the final aggregate effect of the Russian system, and the success or failure of the Five Year Plans and collectivized farming as a whole; in addition, we may now expect analyses of Russian military defeats and vieto.des as so many tremendous, if incomplete, tests of the Soviet economic and social system. The present book has a different emphasis. Its focus is not on aggregate results that the huge machinery has produced or has failed to produce, but on some of the smallest constituent units of economic volition-the single industrial plant, the single collective farm. More particularly, it centers on the managers of plants, the chairmen and other officers of collective farms (kolkhozes). Technological data, laws of physics and chemistry, are the same for the Soviet plant manager and his equivalent in America. Differences arising from geographical position, size, or natural resources are not too formidable. Differences in human material, although enormous, are probably diminishing, in so far as learned xiii

XlV

INTRODUCTION

industrial skill is concerned. It is the institutions, the man-made laws and practices, which make managerial activities in Russian industry and agriculture so different from those of this country. Nowhere do the peculiarities of total planning and collective farming under the all-decisive rule of Party-State reveal themselves more strikingly than in the functions and incentives of Russian plant and kolkhoz administrators. On the other hand, in no field can one learn more from the similarities-actual or emergent or re-emergent-between Soviet economic institutions and the administrative or economic practices of other countries, especially under war pressure. To the student of human organization, both are instructive: that which varies and that which persists, the peculiar and the common. Millions of people are in combat; farms and cities, factories, mines, shipyards, ha.ve been lost to the enemy or have become battlefields. Can one describe 'management in industry and agriculture' where both are truncated? The complicated machinery of long-term planning, of directing and supervising, must have lost much of its subtle detail: war's daily needs are too brutal, communications and government are strained or torn into parts. Production continues amidst scarcity and ruin. And management often means maintaining work just behind the front, or precariously evacuating and reintegrating salvage. But Russian economic institutions in war are not the subject of this book. For such a study, reliable material is not yet at hand. Except occasionally, the authors have not tried to go beyond 22 June 1941, the day of the German invasion. Their present tense is the historical present. Nevertheless, the conditions they analyze have more than 'merely historical' value, to use an expression popular with those who think that history is only for the historians. We do not think so. There is no doubt, to be sure, that such a war as the present greatly affects both men and their laws. It would be folly to exclude the possibility of profound economic changes and

INTRODUCTION

xv

political shifts, and a consequent resetting of Russian economic institutions after the war. Yet, without claiming that 1941 equals 1945, the authors have found in the material of pre-I94I much that will be useful for an understanding of 1945, of 1950, perhaps even of a more remote future. Leaving post-war Russia aside, its pre-war experiments are instructive in themselves. The Americall reader will often recognize administrative puzzles and struggles of our own centralized war economy. He may welcome the test of certain principles carried to their extreme. As in so many fields where interest and belief prevail over the quest for truth, debates on Russia, in both word and print, have often been at cross-purposes. Worse still, labels have often been substituted for facts: 'Nazism and Communism are really the same thing.' 'Nazism and Communism are opposite philosophies.' 'The Soviet system is socialism and therefore bad.' 'The Soviet system is socialism and therefore good.' 'The Soviet system is a caricature of socialism.' 'What is socialism?' The discussion begins turning hopelessly on abstract concepts, ill-defined, emotionally overloaded, whether called socialism or technocracy or state capitalism or managerial revolution. Of course, there are many countries with certain ascertainable common -features to which one can reasonably agree to give a common name, say, capitalism. But why quarrel whether an animal species of which only one individual has ever been observed (and that one imperfectly) is it snark or a jubjub? In .assigning to a research group the task of analyzing management in Russian industry and agriculture, the Graduate Faculty asked them to ascertain facts, not discuss words. A picture was to be drawn, as detailed as the data would permit, of the machinery of Soviet management; of the distribution of functions and

·

XVI

INTRODUCTION

powers in factory and farm; of the origin, status, incentives, and, if possible, ideology of managerial persollnel. Reserve and caution in reaching conclusions were obviously essential. Where appraisal was made, such criteria were applied as are generally recognized in discussions of economic and social policy. Contribution to higher national income by producing larger quantities of better and more useful goods was considered a success, the opposite, a failure. More participation of individuals in the shaping of their work and life was considered a positive value: hence the concern with the role of labor unions, with the self-government of kolkhozes, and with inequalities in social status and power. Yet any such evaluation had to remain incomplete: a study on management can cover but a corner of the whole problem of the productivity, equality, liberty of the people engaged in Russia's production. Nor was any attempt made to praise or blame the government for the way in which shares of product have been apportioned among consumption, investment, and armament. Furthermore, as few data are available on the operation of plants producing finished war equipment, most information given in the study is confined to raw materials and semi-finished goods (including metals and fuel) and to civilian consumption goods. Students of capitalism are wont to see in the entrepreneur's profit the mainspring of economic action. He is spurred to expand or innovate by hope of gain, deterred from producing by fear of loss. He uses his money, or that entrusted to him by stockholders or lenders, to employ labor, machines, materials, in those industries and in such ways as promise the highest profits. His judgment and that of his competitors, if such there be, therefore determine how a country's resources are used. A line has been drawn, to be sure, between 'entrepreneurial' decisions thus defined and the activities of the 'manager' pure and simple, doing routine work and obtaining as his reward a more or less fixed salary rather than an uncertain profit. But the distinc-

INTRODUCTION

XVll

tion is not easy when expanding output, changing techniques, and :fluctuating markets make routine management exceptional. In fact, there is probably a large body of people, including those at the head of large corporate enterprises, who are at once entrepreneurs and managers (although not always 'capitalists,' i.e. suppliers of capital). These are the 'businessmen.' Soviet indllstry is managed, from top to bottom, by salaried officials. Their income is but loosely connected with profits of the plants or groups of plants they manage: it will be seen that the connection is much more remote than in the case of corporation officials. One might be inclined to seek analogies in the major well-established State-run enterprises of capitalist countries: the United States Post Office, European State railroads, State credit institutions. One might thus conceive of Russian industry as run by 'pure managers' in government pay. But Russian economic life of this generation cannot, by any stretch of the imagination, be called routine: the country's industry has rapidly expanded, its agriculture has been reorganized, new methods have been adopted with enthusiasm, plans or revolutionary scope are made and constantly revised. To be sure, Soviet law and literature try to distinguish current 'operative' functions-procuring and disposing of goods, hiring labor, supervising production-from 'planning' proper, and, more generally, from 'directives' or policy-making. In theory~ the manager of a single plant is confined to operative functions, while special government organs do the planning, within general directives provided by the Party. It will be seen that this theory is neither comprehensive, nor final, nor applied. It leaves ill-defined the functions of powerful administrative organs; it is being constantly modified and occasionally reversed; it is often contradicted in practice. Who, then, makes decisions and shoulders responsibilities cor~ responding to those of an American businessman? Not the head of a single plant or collective farm. Perhaps, then, Stalin in person? If neither is fully the case, how is responsibility shared be-

xviii

INTRODUCTION

tween top government departments in Moscow, intermediate organs for areas or industries, and, say, a plant manager? How arc all these bodies and persons related to those who write the Five Year Plans and to State banks which dispense credit? With the Communist Party in absolute control of government, and with regional and, to some extent, functional ramifications of the Party paralleling those of the State, how much can the State official say and the Party official unsay? To whom does the plant manager or kolkhoz chairman owe ultimate allegiance? In particular, what has been the power of Party members who happen to be employees of a plant? Or of village Communists, local or imported, whose business it has been to speed collectivization? How much self-government or co-partnership or labor-union influence is there in the working community of a Russian industrial plant? How strong, in collectively run farms, are elements of co-operative production as compared with elements of State control or with those residuals of individualist farming, the homestead plots? Under Soviet conditions of economy, functions pertaining to management have acquired highly characteristic forms. The peculiarities of the day-to-day tasks of a single Soviet-manager are probably less known to the American reader than is the general idea of total centralized planning. Those tasks are profoundly affected by the Plan (whether fulfilled or not) and by the almost complete absence of free mar1cets. How does the manager obtain liquid funds, raw materials, and machine parts? How does he supply others with his products? How were the vast human masses recl'Uited, to build and run new gigantic factories? Who fixes their wages and working conditions? The peculiarities of current farm management are, if possible, even greater: kolkhozes are a novel production form. Both the quantities and prices of industrial goods are fixed by authorities. The manager, head of the lowest unit of industrial administration, participates in the working out of details, not of general outlines of a Five Year Plan or its currently revised short-

INTRODUCTION

XIX

term versions. And, although over-fulfilment of the allotted quota is encouraged and rewarded, production of a plant must, on the whole, appear rigid as compared with the exu'emely :flexible output of a capitalist enterprise, sensitive to minute changes in profit expectation. The plant's capacity is fixed by outside authorities. In theolY, at least, construction funds at the manager's disposal are limited to repairs and, under certain conditions, to workers' housing construction. To sell parts of a plant or equipment is strictly illegal. The most important materials are allocated from above. True, many of these procedures and Hmitations have remained on paper, have been evaded or breached in practice. It has been the attempt of the authors to study both theory and practice. The Soviet manager is unable to manipulate freely the size of his plant or his inventories. Nor can he take advantage of marlcet situations, current or prospective, by bargaining with sources of supplies or with customers for better prices, or by winning customers through low prices, and sources of supplies through high ones. To be sure, with supply chronically lagging behind demand, it would in any case be pointless for a manager to reduce prices in order to win customers. On the other hand, to win preference from a source of supplies by bidding up prices for raw materials would not be pointless.-But it is forbidden. The fixing of price and output is a logical feature of overall planning. One possible avenue of escape from fixed prices and prescribed production figures is by making inferior goods. The government naturally-if not always successfully-tries to block this escape. The manager's energies are thus directed into the one remaining channel: reduction of real unit costs of production, i.e. the amount of materials and labor going into one unit of product. A fixed portion of the fixed factory price is called 'planned profit,' the other portion 'planned costs.' But a sldllful manager, worthy of honors, promotions, and bonuses, is expected to bring actual

xx

INTRODUCTION

costs below planned costs and thus to raise profits above the planned figure. On the other hand, to let actual cost rise above planned cost is to fall short of planned profits or even-if costs reach fixed price-to incur loss: such a manager is frowned upon, investigated-perhaps demoted, transferred, or punished-unless he can show that prices of raw materials and labor had risen (thus affecting money cost, not real cost), or unless the plant is working under government subsidy. Subsidies, formerly the rule, had by 1940 become exceptions. The rediscovery of the profit principle was hailed as an achievement crowning the gradual return of industry to business accountability, so completely abandoned in the early years of revolution, during War Communism and hyper~inflation. Yet Soviet plant profit is very different from its Western counterpart. As we have just seen, a Soviet manager can make or miss profit only by his snccess or failure in keeping unit costs down. But whether or not profits rise, they have only a very indirect connection with the income of the manager, his supervisors, planning officials, or whoever may be regarded as the Russian counterpart of the American businessman. The beneficiaries of any profits made by the plant are the State, the capital reserves of the plant, and certain special funds designed to foster welfare and efficiency of personnel. Bonuses to managers are calculated all the basis not of profits but of extra output or achieved cost reduction. Profits are only one of the dozen arithmetically interdependent indices of success that plant accountants and statisticians must work out for the current information of higher agencies of State industry. One might, therefore, ask why profit, being merely the difference between government~fixed prices multiplied by governmentfixed output, and the costs of production, should be given so much attention by Soviet economists as a particularly important success~indicator, a new and efficient weapon of planned economy. Since the profit figure provides no information concerning the success of the plant not already contained in cost and output

INTRODUCTION

XXI

figures, and since all these figures are reported to higher authorities (who periodically mete out blame or praise), why does Soviet literature single out profits as a particular 'incentive,' somewhat reminiscent of the private entrepreneurial profits of capitalist countries? The truth is that even under capitalism the entrepreneur's profit does more than add to his income. It also enlarges his radius of influence; in particular, the entrepreneur is able to use a part of profits to enlarge the plant entrusted to him. But so is the Soviet manager, at least in so far as the portion of profits allotted to the plant's capital fund is concerned. In addition, the special welfare and efficiency funds entrusted to the manager raise his influence and prestige with the personnel. Overall planning is thus combined with a rather mild dose of profit incentive. But profits can be made only by reducing costs. Since prices are fixed, cost economies are not passed on to consumers but are divided between the State and the plant. This is similar to what happens under capitalism to cost economies in a monopolistic enterprise subject to corporation tax. The consumer benefits from technical progress not fully and surely, as he would if free competition were to bring the price down to the new cost level and thus release a part of the consumer's income to be spent as he chooses; here he benefits only in part and uncertainly. A portion of profits arising from cost economies remains in the successful plant. It is very likely used to expand output, even though the public may not be eager to increase exclusively its consumption of the products of that particular plant or industry. Another portion of the profit goes to finance State expenditures. By a happy accident, the State may invest its receipts so as to make exactly those goods or services most eagerly sought by the public. But this is not necessarily the case. By withholding cost economies from consumers, the system deprives them of the possibility of influencing the allocation of labor and other resources released by technical progress.

xxii

INTRODUCTION

True, decisions about expenditures on, say, army and armaments (or even schools and pavements) cannot be made dependent on each single man in the market and his desire to save or consume certain goods and services rather than others. Taxation is inevitable for such purposes. If, furthermore, the considered policy of the State is to expand the country's equipment rapidly, it may be impossible to rely on the individual's desire to save. In other words, the public representatives or officials may consider themselves, in these particular fields, less indolent and shortsighted than their constituents or subjects, more apt to see and provide for the common good if not of this, then of the next generation. Thus in every economic system arises the question how to provide for army, schools, possibly for expansion of industry, while using the remainder of national reSOUl'ces to the best satisfaction of consumer desires. The Russian answer has been an enormous turnover tax. In addition, since prices and outputs are· fixed, the State's fixed share in profits (especially in their 'planned' part, j.e. apart from cost economies) differs only in form from the turnover tax. Together, the turnover tax and the State's profit share are so large as to destroy all relation between cost to consumer and cost to producer. The comparative urgency which buyers assign to various goods has no effect on prices they must pay, since they cannot bid up prices or force them down. The Russian schedule of fixed prices, as well as of variegated sales-tax rates, suggests that the ruling principle has been that of all monopolists, to charge 'what the traffic will bear,' with high taxes and profit margins for articles of urgent consumer need. Were State revenues of equal amount collected by income tax, and managers compelled to sell at cost 1 (including managerial 1 Here cost means marginal cost (i.e. the cost of making an additional unit of output), not average cost (Le. all the past or current outlays of the producer divided by the output they have helped to create). It is essential that the cost of hiring additional workers or of adding new equipment to satisfy consumer demand influences price and output, thus directing men and equipment to the uses most wanted. On the other hand, price and output must not be influenced, for example, by depreciation charges on such old equipment as will not be replaced and as would not have been installed had

INTRODUCTION

...

XXll1

salaries as well as other wages), the consumer-workers would arrange their budgets (after tax) as best they liked, bidding up prices of the most desired goods, thus raising wages payable in the most urgently needed industries, and offering their labor in those very industrie~. National resources, apart from those earmarked for specific State functions, would thus be used in the way most desired by the individuals. This is true of a progressive as well as of a flat income tax, propresent techniques and tastes been foreseen. This point of view has been developed, with respect to any enterprise run in the public interest, by Dickinson, Hall, Hotelling, Lange, Lerner, Meade, Pigou, and others. The distinction is important and must not be waved aside by such remarkstrue but irrelevant-as 'in the long run, average and marginal cost are identical' and 'under free competition, price is equal to marginal cost but also, in the long run, to average cost.' Practical decisions are made in the short, not the long run. The mechanism of free competition attracting or repelling private producers by profits or losses in individual industries does tend to annihilate any excess of price (and hence of marginal costs) over average costs, or vice versa. But this mechanism cannot and need not be copied in the case of managers of public plants. Their prescribed duty need not be to raise profit, but can, instead, require them to arrange production so as to equate the cost of making a new unit with its market price. TIlere is no reason why construction of new public equipment should be financed OUt of revenue earned on old and outdated public equipment rather than out of general public funds raised by taxation of incomes. The character of the present introduction precludes more thorough discussion of this point. It was not possible to provide in the relevant chapter (VI) sufficient material on· the depreciation policy of Soviet price-fixers and accountants. This is partly because of lacunae in the Russian legal and economic sources. Soviet legislators and writers pay little regard to this point. They have taken over wholesale the traditional accountancy principles of private firms (such as the Lancashire cotton mill run by Friedrich Engels), as correctly seen and described by Karl Marx. Put in the position of running public-owned industry, Soviet economists have uncritically transferred from the private to the public sphere both a respect for profits and a suspicion of subsidies. In this connection, see H. D. Dickinson, Economics of Socialism (Oxford, 1939), especially eh. III; R. L. Hall, The Economic System in a Socialist State (London, 1937); Harold Hotelling, 'The General Welfare in Relation to Problems of Taxation and of Railway and Utility Rates,' in Econometrica, VI:3 (July 1938), pp. 242-69; Oscar Lange (with Fred M. Taylor and Benjamin E. Lippincott), On the Economic Theory of Socialism (St. Paul, 1938); Abba P. Lerner, ~tatics and Dynamics in Socialist Economics,' in Economic Journal. (1937), p. 253; James Meade and Charles Hitch, In-. troduction to Economic Analysis and Policy (New York, 1938), especially Parts II and III.

XXIV

INTRODUCTION

vided there are free markets for goods and jobs. But freedom of choice of goods and, to a large extent, of jobs is curtailed in Russia, the former by the price and tax system, the latter by methods of labor recruiting and by the rigidity of planned out~ put. The only justification for the Russian system of fixed prices and huge sales taxes might lie in the simplicity of this form of revenue collection during hurried industrialization under threat of war. Even this advantage of sales taxes is dubious, although it may have carried some weight in the turmoil of Russian industrial and military expansion begun under conditions of analphabetism and ruin. Three main complaints can be and have been raised against capitalism: monopoly. unemployment, privileges. By failing to sell at cost and by adding sales taxes to fixed prices, the Soviet system has maintained one characteristic feature of monopoly: it does not allocate the nation's resources in the way most desirable to the individual consumer-worker. The resources thus imperfectly allocated may nevertheless be fully used: neither men nor machines are idle, although too many are employed-wasted, in a sense-in certain industries, and too few in others, compared with the scale of consumer-worker desires. Unemployment has to do not with the divorce between current prices and costs caused by price fixation by private or state monopoly. but with future plans, with fears and hopes of employers, be they monopolistic or not. On the face of it, exaggerated and contagious fears and hopes will be smoothed out, chances for continuous planning ahead and therefore for stable employment enhanced, if those who plan are informed of each other's expectations and mutually correct them: a point in favor of centralized planning, of a Gosplan-like dearing house for hopes and fears. It can be argued, however, that to correct ill-informed,· exag-

INTRODUCTION

xxv

gerated expectations, it is not· at all necessary to concentrate de~ cisions in one place and take all planning initiative away from individual plant managers. The latter certainly know more about specific opportunities and trends in their fields and are quicker to use them. It is only with regard to the general spending and saving of the people and to the general aims (such as welfare or war) of the people's state, that the top economic officials are probably better informed. To counteract hopes and fears epidemically swaying the whole country, it may suffice to entrust economic officials (as is now done, in fact, in most countries) with the fiscal and monetary machinery to curtail or expand the overall funds available to producers and consumers-and to leave to individuals the decision how best to use the available funds. In Russia, centralized planning and management happened to be applied not to a slowly growing economy and its fluctuations, but to a rapid State-financed industrial and military expansion, comparable in speed to the present war effort of the United States. In both countries, jobs have been found for all. The disappearance of unemployment in Russia under the Plans is, therefore, no conclusive validation of centralized planning. Unemployment might also have disappeared had funds of the same size come into the hands of freely deciding producers, whether through State orders for investment goods or war goods, or (in the case of another welfare and war policy) through public demand for consumables. At the same time, the Russian experience gives evidence-partly recorded in this book-of frictions and human deficiencies in the huge machinery so overloaded with responsibilities. Private monopolies have, however, another feature: monop~ olistic profits are appropriated by private persons; thus inequali~ ties of income, status, and power are aggravated. This is not perceptible in Russia. Profits do not become private incomes. If there are privileges, they are not because of profits. Nor is it clear

xxvi

INTRODUCTION

whether there are in Russia any other factors which may perpetuate group privileges. To be sure, rare talents are paid high salaries in Russia-in money or in kind-and extra effort is rewarded by bonus. To ensure a high level of production, hardly any other method could have been devised, except substituting for acquisitive motives those of love of work and self-expression, of ambition and honor and social recognition, or even of a self-effacing sense of duty, patriotism, and idealism. In the United States we know of such substitution. It has been practiced on a large scale in Soviet Russia. Furthermore, opportunities for lucrative private investment are absent. What income inequality remains cannot fully manifest itself in unequal standards of living: luxurious ostentation is not approved by prevailing mores, and, what is more, luxuries, so far, have often been virtually unavailable. All these factors have, no doubt, helped dam inequalities in living conditions while getting the most out of peak abilities and skills. Even so, inequalities are considerable. But even with equalized consumption levels, there would in any society with divided functions be differences in standing and power. Certain functions imply more leadership than others. The question is whether the differences are growing-they would diminish if educational opportunities were equal-and whether the functional groups can perpetuate themselves, either by inheritance or co-optation. In the traditional ideology of the ruling Party (whether realized in practice or not), political hegemony belongs-or did so until recently-to industrial manual workers. On the other hand, the official concept of 'Soviet intelligentsia' linl{s together persons with administrative functions, general as well as economic, with those exercising other non-manual skills. Because of the economic and social peculiarities of the system, the following list of 'Soviet intelligentsia' supplied by Premier V. Molotov is of great interest (in particular, some of the sub-items under I refer to 'executives' in the American sense, the special subject matter of this book):

INTRODUCTION

XXVll

Composition of Soviet Intelligentsia on I January 1937 2 (In thousands of persons) I.

Head~

of enterprises, institutions, workshops, State farms, collectlve farms, etc ............................................ 1,751

(Heads of administrative, health, and cultural institutions .•.... Directors and heads of State enterprises, workshops, and plant sections, and their deputies ..............................•. Chairmen and deputy chairmen of collective farms and administrators of auxiliary fanns for marketed products .......... Directors of Machine-Tractor Stations and of State farms, and administrators of auxiliary farms...................... Heads of industrial co-operatives............................ Directors and administrators of stores ......•............•.... Directors and administrators of public ~ating places...........

450 350 582 19 40 250 60)

2. Engineers and architects (excluding heads of enterprises and workshops) ..........................•...................... 150 3. Intermediate technical persollnel (engineering aids, foresters, station masters, etc.) .......................... , . • .. . . . . . . . .. . . . . 810 4. Agronomists •................................................. 80 5. Other agricultural specialists (surveyors, animal husbandmen, etc.) 96 6. Science workers (professors and other college instructors, etc.) . . . So 7. Tcachers ..................................................... 969 S. Cultural workers (journalists, librarians, club administrators, etc.) 297 9. Arts workers. . . . . . . . • . . . . . . . . . .. . . . . .. . • . •. .. . . .. .• . . .• . . . . . . . 159 10. Physicians •..•....•...................•••..................... 132 I I. Intermcdiatc medical personnel (medical attendants, midwives, nurses) .... . . . . . • . . . . . .• • . . . . . . . .• . . . . . .. .. . . .. .•• . .•. . . . . . . 3S1 12. Economists, statisticians ...•......•.....••..........•..•....... S22 13. Bookkeepers, accountants ...............•...................... 1,617 14. Justice workers (judges, public prosecutors, etc.) . .• .•• . .. . .. • • . . 46 IS. College students... •......... .......•.........•.....•.......•.. 55 0 16. Other groups of intelligentsia (including military 8) .•••.•...•••• 1,550 Grand Total .•............................................ 9,59 1

Thus out of nearly ten million salary-earners, low and high, constituting the 'Soviet intelligentsia' in 1937, about one and three quarters millions were leading personnel of institutions and enterprises in city and country; of these about a third of a million were industrial managers or their assistants. The author of 2 V. Molotov, The Third Five Year Plan, Address to the 18th Party Congress (Moscow, 1939), PP· 44-5· 8 Presumably officers.

XXVlll

INTRODUCTION

Chapter IX offers a hypothesis which may perhaps be best formulated as follows: By the time of the outbreak of war, industrial managers had become the nucleus of what might develop into a privileged and ruling class; inequality of educational opportunities tended to make hereditary the power and standing of this group and others that enjoy a similar educational level, exercise functions of leadership, and are related to the managers and to each other by links of family and social intercourse; there are traces of a deliberate policy fostering the formation, consolidation, and rule of this stratum. The other authors and the present writer have not found this hypothesis sufficiently supported by facts. It has been pointed out that any possible self-perpetuation of a leading stratum must have been of very short duration, not earlier than the last 'purge.' There is some question that educational inequalities existing in Soviet Russia could have this effect of self-perpetuating the leading groups. The system of State scholarships for colleges did equalize training opportunities as much as was possible under conditions of unequal incomes and home backgrounds, short of introducing full State maintenance for all children. In particular, it is questioned whether the failure to provide equal education on a still larger scale, and especially whether the recent raising of college admission requirements (which fell heaviest on young people with poorer home backgrounds), are to be explained by motives other than limitations of State finances and the necessities of war preparation. The general impression is still that of trial and error. The power of the industrial manager has been repeatedly reduced and again enlarged. Superimposed on the great policy zigzags-War Communism (1918-2.1) to New Economic Policy (1921-8) to Five Year Plans (1928- )-were numerous minor waves, not always synchronized in all fields. These were partly genuine experiments, successive attempts to find an optimum solution. As often as not, however, the ups and downs reflected political struggles and

INTRODUCTION

XXIX

changes in the balance of power. Distrust of the manager by the Party man periodically flared up and subsided. The general trend, too, which may be discovered behind these fluctuations in managerial status and functions, was economic only in so far as it reflected the natural recovery and consolidation of industry after the First World War and the Revolution, and the gradual training and selection of skills. The sociological and political components of the trend were at least as decisive. The Party which has ruled for a quarter of a century has undergone profound changes both in composition and attitude, while a new generation has grown into positions of industrial leadership. Full analysis of these fluctuations and trends would have to go far beyond our subject: parallel changes that occurred in general administration, army, education, possibly in arts and mores, would have to be studied to throw more light on this important piece of social history. One of the authors of the present book (Mr. Yugow) deliberately refrained from daring attempts to fathom sociological causes. In the chapters assigned to him, he preferred to describe facts mainly in terms of economic growth, consolidation, experimentation. Another author (Mr. Schwarz) has made such an attempt. His hypotheses and tentative results will be found interesting and provocative, although no ultimate validity can be claimed until further studies and events have provided more solid ground. This book is not a series of monologues. Its specific approach, the study of managers rather than of the aggregate economy, was suggested by the late Arthur Feiler. He co-ordinated the work in its earlier stages. Feiler was an unbiased and scholarly observer of the Bolshevik experiment:' As he was also well-versed in the institutions and techniques of modern capitalism, he could judge Bolshevism on its merits and not by its name. He was as attached 4 Arthur Feiler, The Experiment of Bolshevism (New York, 1930); 'The Soviet Union and the Business Cycle,' in Social Resem-ch (August 1936), pp. 282-3°3.

xxx

INTRODUCTION

to the cause of freedom and as familiar with the great advantages of free markets and private enterprise as he was anxious to understand the great Revolution. He saw in the problem of industrial and farm managers a clue to understanding both the economics and sociology of modern Russia. The study of collective farm management 5 was assigned to Mr. Yugow. In the field of industrial management Mr. Bienstock undertook to analyze managerial powers and incentives. Mr. Yugow studied the economics and accountancy of Soviet plants, and Mr. Schwarz the sociological background. These aspects proved to be closely interrelated-hence changes in the original scheme and dual authorship of certain chapters. The final responsibility for each chapter lies, however, with the author or authors indicated by initials in the Table of Contents. The method of procedure has inevitably produced a certain amount of repetition, but it is hoped that this will serve to facilitate an understanding of the problems. Until 1922 the three authors were outstandingly active in Russian public affairs, as economic and political writers and, temporarily, as officials. Since that time they have lived abroad, but their work has involved daily and thorough study of Russia. Their original insight into their native country and their uninterrupted occupation with it probably' make up for the handicap under which they appear to suffer, as compared with some more recent foreign visitors to Russia. Certainly, the reader will do well to consult such outstanding eyewitnesses of Soviet factory life as John Scott. a The contribution of our authors is complementary to such reports: it is a systematic analysis of published sources by men who Can read between the lines. The reader will be able to gauge the force, maturity, and tranquillity of their ~ No attempt was made to include a study of the other agricultural production form, the State farm. It was thought that such a study would reveal few problems not shown in an analysis of State industrial plants, For similar l'easons, specific study of trade and bank management was also omitted, except where connected with supply and credit problems of industry. 6 John Scott, Behind the Urals (New York, 1941 ).

INTRODUCTION

XXX!

judgment and their success in detaching themselves from preconceived views and political bias. Sources were, in the main, legislative material, including public discussions of Communist Party bodies; extensive economic and legal literature (books, periodicals, and the daily press) on management practice, both general and by industries. This includes illuminating 'self-criticism,' originating in the jealousies or discontent of rivals, subordinates, or customers; it has rightly been called the Soviet surrogate for parliamentary clash of opinions, and must naturally be treated with appropriate circumspection. Finally, use has been made of Soviet fiction. Russian fiction has preserved its naturalistic tradition. Soviet novelists and shortstory writers often claim to record social facts quasi-photographically. With all necessary caution, and discounting for official cant, we may learn from them much about the people, or at least about what models the State holds up to them. All these sources require· delicate and cautious treatment. Even in legal and statistical matters, the great gaps and contradictions, and the fluidity of concepts characteristic of Russian sources are perplexing to the Westerner. For example, it has proved impossible for Mr. Yugow to compile a complete statistical picture of actual revenues and costs, and of the sources and allocation of profits, subsidies, capital reserves, and turnover tax, of Soviet industry for a single year or a five-year period, not to speak of a series of years. There is nothing comparable either to published reports of American corporations or to detailed estimated breakdowns of national income and expenditure. To be sure, Soviet censorship has occasionally been relaxed in order to provide publicity material to some outstanding official: this gives the student important information which may be fit~d into the picture with ingenuity and circumspection. The three authors of the study and the writer of the present introduction have continually interchanged hypotheses and evi~ dence, criticisms and suggestions. Common ground was often found when misunderstandings were weeded out. In a few cases,

XXX11

INTRODUCTION

however, where the problem is too delicate or complicated to be finally tested with the material in hand, an a:uthor presents his working hypothesis, clearly designating it as such, and accepting sole responsibility for it. Even so, discussion of the hypothesis always helped locate the essential remaining unknowns.

PART I MANAGEMENT IN INDUSTRY

I

Organs of Industrial Management a. DEVELOPMENT AND STRUcrURE

AS State-owned industry was consolidated and expanded uncfer

.n Soviet rule, principles and forms of industrial management underwent many changes and fluctuations, only the most important of which will be treated in this book,l In the present chapter, we shall study the changing relations-and conflicts-between the various State organs of industrial management in and outside plants. Indecision-and some struggle-prevailed concerning principles of organization (was it to be by industries or by geographical areas?), and concerning the question of strict industrial centralization as opposed to some plant autonomy. In the first years after the nationalization of industry, management was controlled by a territorial 'Economic Council' in each large city and in almost each of the seventy-eight provinces (the Czarist guberniya, abolished in 1936). The Economic Councils were attached to the corresponding organs of local or regional administration, the Soviets (Councils) of Workers and Peasants. In addition, all large and medium-sized plants were organized by industries an d controlled by Main Industrial Boards (committees) or Glavks. Both GlavIes and territorial Economic Councils were, in theory, subordinate to the Supreme Economic Council of the U.S.S.R. Throughout the years of the Civil War and economic collapse, however, organization by industries was rather nominal. The inter-regional economic nexus and local contacts with the 1 'Industry' is used in this study in its narrower sense, and thus does not include agriculture, trade, or transportation.

3

4

MANAGEMENT IN INDUSTRY

central govcrnment were very weak Accordingly, local Soviets and thcir organs, the local Economic Councils, had greater opportunities than did the Main Boards of individual industries, impotent in remote Moscow offices and unable to provide fuel, raw materials, food, or transportation. Gradually, however, as the central power became stronger around 1922, and as the economic structure gained in cohesion under the New Economic Policy (the NEP, 1921-8) the territorial Economic Councils were pushed aside, while national consolidation of individual industries progressed. In 1923 the functions of provincial and municipal Economic Councils were ordered restricted to small industries of local significance. The administration of medium-sized and large industry was ordered more effectively centralized in the Supreme Economic Council, its industrial divisions (GlavIes), and the territorial or industrial subdivisions of the latter, the 'Trusts.' But this centralized machine did not work adequately and had to be reorganized again and again. New Glavks were created, small ones merged into larger ones. Plants were transferred from one Glavk to another. In 1932 the Supreme Economic Council was split into three large industrial Narkomats or People's Commissariats, one for Heavy Industry, one for Light Industry, and one for the Lumber Industry. The food industry had earlier (1930) been placed in a special People's Commissariat for Supply, which also controlled the storage and distribution of farm products. Step by step, more People's Commissariats were created by splitting up old ones, until, in 1943, there were twenty-five industrial People's Commissariats. The governments of the constituent Republics have People's Commissariats of their own for certain industries. Since 1940, the administration of industry has, on the whole, been organized as follows:

ORGANS OF INDUSTRIAL MANAGEMENT

5

SUPREME ORGANS OF INDUSTRIAL ADMINISTRATION IN THE U.S.S.R. Council of People's Commissars,U.S.S.R.

Gosplan Economsoviet Council of D efensc State Bank

Board of Man Power Committee on Standards Committee on Arts Committee on Cinematographic Industry Committee on Technical Personnel Geological Committee CommilLee on Forest Preservation Board of Weights and Measures Committee on Higher Education All-Union Consumers' Co-operative (T~"'trosoYII')

All-UtliOlJ Narkomals t. For Ferrous Metallurgy 2.

II

3.

"

N on-Ferrous Chemicals

~~

Heavy Machine-Building Medium-sized Machine-Building 6. " General Machine-Building 7. " Electrical Engineering

4. " 5. "

8. " Armaments g. U Munitions 10. II Aircraft II. " Shipbuilding 12. 13.

14· IS·

16. 17· 18.

"

" " "

" "

u

Coal Oil Power Stations

Uniotl-Rep.lblicGtI Narkomats 1.

2.

3.

Machine Tools Paper Rubber Construction

4.

5. 6. 7.

For Timber " Building Materials " Textiles " Light Industry " Food Industry " Fish Industry " Meat and Diliry Products

In Some constiLuent Republics there exist, in addition, People's Commissariats for 'local industry and 'local fuel industry,' which have no corresponding organs in the Union administration.

The more important industries are directly controlled by the so-called 'All-Union People's Commissariats,' without intermediate organs of the constituent Republics. Other industries are controlled by Union Commissariats known as 'Union-Republican People's Commissariats,' which control not directly but through analogous People's Commissariats of the constituent Republics.

6

MANAGEMENT, IN INDUSTRY

Such is, in particular, the case in mass consumption industries (food, textiles). Small industries and handicrafts of local importance, or those using chiefly local materials, have no nation-wide organization and are controlled by the People's Commissariats of the individual Republics. Finally, so-called auxiliary industries, which service particular People's Commissariats, are controlled by the latter, e.g. locomotive repair shops by the People's Commissariat for Transport. An economic super-commissariat, the Economsovtet (Economic Council), created in 1937 and headed by the Chairman of the Council of People's Commissars, co-ordinates various economic People's Commissariats.1! In addition to preparing decrees affecting more than one industry, this body must confirm 'supply plans' 8 of individual industries and regions, as well as general plans for the storage and transportation of goods. It decides on the statutes of particular economic People's Commissariats and the transfer of property among State enterprises, and has a number of other functions. A further effort in co-ordination was the setting up, in April 1940, of interdepartmental boards, one for each of six groups of economic People's Commissariats. 4 These, however, have hardly had a chance to prove their utility. At present, each industrial People's Commissar (Narkom), although assisted by consultative boards, runs his industry on the basis of 'one-man control.' 3 Accepted as a matter of course in American public administration, this method was formerly much discussed in revolutionary Russia. The People's Commissar ap2 Decree of 23 November 1937. The Council of Labor and Defense created during the Civil War (30 November 1918) had, on the whole, the same functions as the Economsoviet of 1937. 8 Cf. Chapter v. '" Decree of 15 April 1940. The groups were as follows: metallurgy and chemistry, machine-building, defense industry, fuel and power, mass consumption foods, agriculture and zagotovki (collection and storage of fann products). 5 Yedino-natchaliye, literally, single supervision, rule or authority. See 'Control' under Note 011 Terminology and Citations, above.

ORGANS OF INDUSTRIAL MANAGEMENT

7

points and issues orders to the heads of Glavks and Trusts and to managers of larger plants. He has power to dismiss them. This is mentioned here to emphasize at the outset the fact that the typical manager of a Russian industrial plant is a State official. This well-known fact will be seen to involve a number of problems. Each industrial People's Commissariat is divided into GlavIes for sub-industries, or for areas, or both. Large GIavks are, in turn, subdivided into Trusts. The managers of most industrial plants are directly subordinate to and appointed by the Glavks or Trusts. A typical People's Commissariat (or Glavk, or Trust) would have these departments: technical, planning, finance, supply and sale, construction, manpower, accounting. In the first period of centralized industrial management (1920-33) each of these socalled 'functional' departments controlled directly the activities of the corresponding department of subordinate plants. This practice, dlaatic and cumbersome, was stopped by a decision of the Communist Party Congress (1934), which strengthened the oneman control of both the plant manager and the chief of the People's Commissariat (or Glavk, or Trust).6 Of the two administrative links intermediate between the People's Commissariat and a typical plant-the Glavk and'the Trustone (generally the Trust) was recently (1936-40) suppressed in certain industries. This long-overdue simplification :tesponded, in part at least, to certain changes in the structure of production. Parallel with the development of highly specialized plants was an increase in co-operation between plants producing similar goods (the aim being to secure better utilization of equipment) and between plants supplying and those receiving raw materials or semifinished goods. There grew in importance a new, complex type of plant, the Kombinat, which produces a wide rallge of goods based on a single main raw material, with its by-products and waste. The largest Soviet plants are such combines, among them 6 17 th Party Congress, p. 673. See also c, below, on the 'f\llJ.ctional' system in plants.

8

MANAGEMENT IN INDUSTRY

Dnepro Kombinat (based on water power), Magnitogorski Kombinat (based on iron ore), and Bereznikovski Kombinat (based on potassium). Obviously, neither plants heavily involved in mutual co-operation nor, a fortiori, 'combines' with diversified production can be successfully controlled by such highly specialized agencies as the Trusts.

b.

PLANT MANAGEMENT

vs.

HIGHER ORGANS OF STATE INDUSTRY

The basic production unit, the 'plant' or 'enterprise,' is never easily defined. Precision is particularly difficult in the case of the U.S.S.R., where the nationalization of all important economic activities has done away with many old legal concepts without creating exact substitutes. In the terminology of Russian official statistics, an independent industrial plant (predpriyatiye, literally enterprise) has its own balance sheet and plan of production and finance; some fixed capital (machines, building) and working capital; and an independent current account at the State Bank. 7 The 'director' or manager is the leading official of a plant and the recognized representative of its interests, especially in matters concerning its property. Relations between plant management and higher agencies of economic administration, the limits of the autonomy of a plant manager, present one of the most complicated and acute problems of all Soviet economy. Although plant management has been repeatedly declared 'autonomous' to a considerable degree, it is not only an element in a tremendous State economic hierarchy but it is also subj ect to a changing degree of Party control, if no longer of labor-union control. 8 In matters affecting plant property, the manager's powers are very limited, indeed. His formal right to 'administer' (rasporyazhat'sya) the State-owned property of the plant is, as a rule, recfA. D. Mikhailov, Industrial Statistics (Moscow, 1939), pp. 11-13. On the plant's own 'production and finance plan' see Chapter Iv.d. See also 'Plant' in Note on Tenninology and Citations, above. 8 Cf. Chapters II and III.

ORGANS OF INDUSTRIAL MANAGEMENT

9 ognized in official regulations. This right, however, is much narrower than the word might suggest, and does not include the right to sell products except on the basis of a sales contract approved or even drawn by the proper Glavk or People's Commissariat. He may acquire property for the plant only within a supply budget approved by the Glavk or People's Commissariat,9 except that, in extraordinary cases, he may acquire necessary equipment costing not more than 200 roubles. Nor is he entitled to sell or barter equipment or materials without the special permission of the Economsoviet. Numerous violations or evasions of this last rule were noted by the Communist Party Conference of 1941, which found that 'many plants and railroads often sell allegedly superfluous equipment as materials.' A severe decree issued in consequence declared sale by plant directors of machines, equipment, raw material, and fuel to be 'plunder of socialist property,' i.e. a crime. 10 True, high organs of State and Party have more than once declared that the plant manager should have full autonomy in the field of production, within the limits of the national Plan and of government decrees. As early as 1934, the government approved 'Model Statutes for Plants in Heavy Industry,' drafted by a conference of managers of large plants and giving them considerable autonomy,11 But, in practice, the personnel of the Glavks and People's Commissariats persistently interfere with current work of plants. The limits of plant autonomy have never been generally determined with any definiteness. The Soviet economic press repeatedly gives space to public discussions of this question. In the fall of 1940, managers of four important Leningrad plants published in Pravda an 'open letter' which probably voiced the sentiment of many Soviet managers,12 The writers find that Party and State expect managers to manage plants 'with authority For details, cf. Chapter v. Decree of the Presidium of the Supreme Soviet of the U.S.S.R., 10 February 1941. 1.l.Published in Steel (1934), No. u-n, pp. 106-11. 12 'On the One-Man Control of the, Manager,' Pravda, 10 September 1940. 9

10

10

MANAGEMENT IN INDUSTRY

and sovereignty.' However, 'the established practice of illterrela~ tions between managers of our plants and the Glavks and People's Commissariats is often inconsistent with these demands of Party and State.' The letter points out the chief limitations on the manager's authority. He is, in the first place, restrained in the distribu~ tion of the 'fund for wages and salaries' (i.e. the pay-roll budget, .fixed in advance for a certain period) among the various categories of employees. Nor is he free in the allotment of 'the manager's fund' (i.e. the sum provided for employees' bonuses).18 The Glavks or People's Commissariats, complains the letter,- go beyond their duty of fixing in advance the plant's manpower and pay roll, and take it on themselves to allocate pay roll among main categories (manual workers, engineers and technicians, office workers, and maintenance workers). The manager is thus deprived of the flexibility necessary to use to the best possible purpose the total amount available. If, while fulfilling his production assignment, the manager finds it possible to reduce working personnel during a quarter in order to accumulate a reserve for efficiency bonuses, the Glavk or People's Commissariat responds by cutting the total allowance for wages and salaries for the remainder of the year. The Glavks also allocate bonuses among categories of employees in advance, thus often preventing managers from encouraging their most talented and useful employees properly and promptly. Greater freedom in using the 'fund for wages' and the 'manager's fund' is demanded. Also harmful are restraints placed on purchases, especially the clause requiring special permission for purchases exceeding 200 roubles. Greater flexibility is sought: the open letter proposes that managers be given the right to buy urgently needed equipment with profits that have accrued from over-fulfilment of Plan and which remain at the disposal of the plant management.14 18 The wages and salaries 'fund' is determined by the plant's 'technicalfinancial plan' (see Chapter IV). Overdrawing within any quarter is a punishable offense. 14 For a more detailed discussion of profits, see Chapter VI.

ORGANS OF INDUSTRIAL MANAGEMENT

I I

The letter of the four managers was sympathetically received by both Pravda and industrial periodicals. Prominent representatives of the Party and government took up the objections to the 'narrow-minded tutelage' of Glavks over plants. Five months later (February 1941), the 18th Party Conference still found cause to decl~e that the 'People's Commissariats and Glavks are in many respects working bureaucratically' and that 'the ma.nager should be enabled to run the plant with full powers, and should be entirely responsible for its condition and work.' 15 Not only the manager's power but his very position has been highly unstable. Frequent reshuffiing and removal of managers make plant autonomy difficult to achieve. Not many managers have the will to struggle for 'autonomy' when, as Stalin put it in March 1939, 'dozens and hundreds of managers and engineers ... were transferred senselessly from one position to another and back.':LO For example, in the Voroshilovllgol' Kombinat (coal mining), 'almost one-third of the pit directors and chief pit engineers were removed in the first half of 1940 .•. The leading managers often have no time to gather experience . . . The ridiculous merry-go-round of thoughtless, wanton shuffling, dismissals and appointments continues.' 17 Thus, the highest organs of State and Party have for several years proclaimed that plant management should be relieved of narrow-minded tutelage and be given necessary autonomy. At the same time, leading officials of the same government, leaciing Communists, People's Commissars, and GlavIc chiefs infringed on autonomy and hobbled plant management in all its activities. This stubborn contradiction had many roots. In the first place, owing to persistent struggles among official organs, the legal norms regulating interrelations between higher and lower State agencies were, quite generally, accepted in practice only slowly. This was especially true of relations between individual links of the eco~ u 18th Party Conference, pp. 5 and

:La 18th Party Congress, p. %9. 17 Pravda, 1 July 1940.

II.

MANAGEMENT IN INDUSTRY

12

nomic hierarchy: neither law nor contract could effectively settle their respective rights and duties under conditions of rapid industrialization and general administrative turmoil. Plants could not become autonomous in fact so long as many were. unable to carry out their plans and needed the help of higher organs to overcome repeated hitches in production. Last but not least, many managers lacked the ability and background necessary to run an autonomous plant. Only in recent years, as Soviet industry has become stronger and its leading personnel has improved by selection and training, have some plant managers won autonomy and made effective the theoretical rights and powers decreed earlier by Party and government.1B They won, particularly, greater freedom to purchase raw materials and equipment,lO Under the pressure of well-managed plants, the number of links in the economic hierarchy was in many places reduced, and plants were relieved of much of the old 'narrow-minded tutelage.' c.

PLANT MANAGER AND ASSISTANTS

If the 'autonomy' of the plant manager in relation to higher agencies of industrial management is still far from real, how does he get on with the leading plant personnel, i.e. in how far is he the 'boss'? The 'Model Statutes for Plants in Heavy Industry,' approved as early as 1934, des!::ribe the manager as 'chief leader of the plant and main organizer of production . . . ; his orders are to be fulfilled without fail by all personnel of the plant as well as by all persons working on the premises of the plant.' 20 Since that time, aU relevant decisions of Congresses and Conferences of the Communist Party have been based on recognition of the manager's full and exclusive power within the plant. 'Each plant has a leader endowed with full power of decision, hence 18 10

Cf. Chapter IX. Cf. Chapter v.

20Steei

(r934),No.1I~U,p. IlO.

ORGANS OF INDUSTRIAL MANAGEMENT

13

fully responsible for everything: the plant manager,' declares an official manua1,21 Apart from subordination to higher industrial agencies, and the influence of Party organs, the manager has, in fact, full independence in dealing with his subordinates. His orders are compulsory for all employees of the plant. He sets tasks for all its divisions and supervises their fulfilment. He selects the leading engineer and technical staff as well as bookkeepers, economists, etc., although appointments of the higher personnel must be approved by the Glavk or People's Commissariat. Even this authority of the manager has been the result of a slow process of development. During the 1920's, when few technically qualified managers were trusted by the Soviet government, the manager was under detailed and, in general, 'narrow-minded' supervision on the part of local Party 'cells' and labor unions with whom he was supposed to carry out 'triangular' co-operation. 22 In addition, at. about the same period, the manager was really dependent on his technical assistants. In the first years after the nationalization of industry, the plant manager was usually a Communist, the so-called 'Red Manager,' and his lack of training put technical management into the hands of the engineers. Less frequently, a non-Pa.rty expert would be appointed manager with a Communist alternate or assistant acting as a vigilant 'commissar,' analogous to the political commissars of the Red Army. In neither case was there, of course, 'one-man contro}.' The peculiar dualism between the manager and his staff added to the chaos and irresponsibility of the triangle formed by the manager, the representatives of the Party, and the unions. This state of affairs no longer exists. The technical staff is now fully subordinated to the manager. As a result of the general rise of technical education and environment, the manager has, as a rule, the necessary technical training. Typically, the present-day manager is a relatively 21 Economic Institute of the Academy of Sciences, Economic! of Socialist Industry (Moscow, 1940), p. 579. 22 Cf. Chapters II and m.

MANAGEMENT IN INDUSTRY

young man, brought up under the Soviet regime. He is almost always a member of the Communist Party.2B The 'triangle,' too, has practically disappeared. As mentioned above,24 most plants as well as higher industrial agencies were for a long time managed on the 'functional' system, i.e. various managerial functions were divided among various plant 'departments.' For instance, in a metallurg'ical plant, a plant planning and production department would layout the production program for the foundry section. Planned production costs of the foundry would be determined by the plant'S 'department of economy.' The amount of needed materials would be fixed by the supply departments. The scale of wages and the norms of labor efficiency would be fixed by the department of wage rates. Still another department would hire and fire foundry workers. The chief of the foundry section, under these circumstances, had little power or responsibility; he merely co-ordinated the orders of other departments. At that time the plant manager could manage the plant only nominally; real management was in the hands of the functional departments headed by assistant managers. In some plants there were fourteen or fifteen such quasi-independent assistant managers 'co-ordinated' by the manager. The management of several big coal pits in the Donbas was divided among twenty-two heads of functional departments: each worked in the head office and had a representative in the pit.2~ In 1934, the 'functional system,' was suppressed: the 17th Congress resolved 'to do away with the functional system in . . . all Soviet economic organs and to reshape them . . . on the basis of production-territorial principles, beginning with the lowest production links and up to the People's Commissariat,' 20 i.e. to divide Cf. Chapter II. Chapter I.a. 25 L. M. Kaganovich. 'On the Working of the Donbas Coal Industry,' Pravda, 9 April I933. 26 17th Party Congress, p. 67 2 • 28

23 00 14,000 29,600 46,7 00 5 2 ,600 36,7 00

45,40 0 40,900 37,600 44,100,

Industry

33,600 31,400 29,200 3 1,9°0 27,900 27,100 30,5 00

The import of these figures may be better appreciated if it is remembered that in 1927-8, immediately before the beginning of the iirst Five Year Plan, only 20,:WO engineers were employed in all Soviet industry,18 Most newly admitted students left colleges 12 See Central Statistical Office, Cultu1'l11 Construction in the U.S.S.R. (Moscow, 1940), pp. 111-12. In the following tables the fi~ures for industry include the construction industry, those for transportatIon include communications. Dots indicate years for which data are lacking. 18 See Gosplan, Five Year Plan for tbe Development of the National Economy of the U.S.S.R. (Moscow, 1929), 1:76.

PLANT MANAGERS

III

and technicums after one or two years of study, and never finished their education. Hence the great difference between the number admitted and the number graduated. After 1932 the number of new admissions was no longer so tremendous, while graduations increased. These figures, indicate improved training of freshmen, owing to changed principles of admission. Of interest also are figures regarding the social origin of students. In 1928-33, the proportion of former manual workers (and their children) among students increased rapidly. In 1933 there began a reverse development.14

Percentage of Manual Wor/eers (and Their Children) Among Students Training for Industry and Transportation 192 8

193 8

193 1

1935

Higher institutions ..... 38.3

6I.9

Technicums ..•...••.... 38'5

60.1

8 { 4305 for industry 59· 48•8 for transportation 41.0 for industry 51 .7 { 42.8 for transportation

62.2

Inasmuch as the percentage of workers in the population increased greatly from 1928 to 1938, the proportion of workers (and their children) among students of higher institutions and technicums appears to have been in 1938 relatively about the same as in 1928. On the other hand, the percentage of salaried emplpyees (or their children) among students grew considerably. The proportion of peasants and their children remained small. 14 See Central Statistical Office, Socialist Construction in the U.S.S,R. (Moscow, 1934), p. 410, ibid. (1936), p. 576, and Cultural Construction in the U.S.S.R. (Moscow, 1940), p. II4. The percentage of manual workers (and their children) among students of all-not only industrial, etc.-higher educational institutions and technicums was:

19 2 8

193[

Higher institutions .•...•.•...•.• :z 5.4 Technicums ....•..........•..•.. 2.5.8

4 2 •6

46.6

MA::N"AGEMENT IN INDUSTRY

Ill.

Social Origins of Students in Higher Institutions 15 ALL HIGIIER INSTITUTIONS, 1938

Tholl-

TOTAL

..........

TRAINING Fan INDUSTRY, 1934

Thollsands

Tholl·

C(wt

CC1!t

sands

Per cant

181

33·9

50

43-5'

94

61.1

~lS

42.2

52

454

48

31.1

115 12 533

21.6 2·3 100.0

II

9.6

II

2

....!..i

7·5 0.2 100.0

~(lllds

Manual workers and their children ....• Salaried employees and specialists and their children ..... Peasants and their children ..... Others .............

TRAINING FOR

INDUSTRY, 19.18

Per

liS

Per

100.0

153

Formerly students classified as children of salaried employees were largely children of medium- and lower-salaried employees, in a material and social situation comparable to that of manual workers. Now what was meant by children of salaried employees was increasingly children of the higher-salaried.10 The lowersalaried appear to have lost the opportunity to give their children 15 Cultural Construction in tlJe U.S.S.R., pp. 114, 127; Central Statistical Office, Cultural Construction in tlJe U.S.S.R. in Figures, frnm tbe 6tb to tbe 7th Soviet Congresses, 1930-34 (Moscow, 1935), pp. 40,. 56. Absolute figures for 1934 had to be estimated on the basis of published percentages given in the last column, and the following considerations: in 1934 there were 199,000 students training for either industry or transportation; applying to 1934 the 1938 ratio of 'industry' to 'transportation' (IIS:3S), the number training for industry in 1934 can be estimated at 153,000. The number of students in all higher institutions in 1934 was 417,000. ~6 According to V. Molotov, Tbe Tbird Five Year Plan, Address to the 18th Party Congress (Moscow, 1939). pp. 44-5, in January 1937 there were 45 0 ,000 chiefs of administrative bodies and institutions of health and culture; 35 0,000 chiefs and assistant chiefs of industrial enterprises, sections, and departments; 2.50,000 other engineers and architects; 132,000 physicians; 80,000 agronomists; 80,000 college professors. To these 1,342,000 people in leading positions or with college education might be added sections of some otfler groups: 82.2,000 economists and statisticians; 969,000 teachers; 297,000 journalists, librarians, etc.; some specialist groups of lesser importance; and 1,55°,000 'other groups of intelligentsia' (see Introduction to the present book, p. xxiii). One may roughly estimate the number of highersalaried employees and specialists at 2.,500,000 to 3,000,000. As in the United States, almost all such persons try to give their children a higher education. Of the total of less than 250,000 children of salaried employees in institutions of higher learning, few can come from the lower strata.

PLANT MANAGERS

II3

a higher education. Significantly, in 1938 the official statistical rubric was for the first time 'children of salaried employees and specialists.' b. SOCIAL TyPES Before proceeding to developments that began in 1936-7, we must describe the earlier type, or rather types, of industrial chiefs. Soviet belles-lettres provide one of the best sources for the study of social development and changes in Soviet Russia. Literary activity has become a favored profession and, however modest its artistic value generally, literary production has been quantitatively great. In any case, its value as a source of knowledge of modern Russia is great, inasmuch as the element of fiction in many works, compared to the amount of straight reporting, is minor. Although exposition is often mutilated by conscious or semi-conscious adaptation to the official political ideology, an attentive reader with some knowledge of the country can easily discern the true face of the people under the official cosmetics. During the last twenty years, and especially since the beginning of the broad industrialization policy, numerous novels have depicted industrial enterprises. In many, industrial chiefs are central characters. The well-known novel of Fedor Gladkov, Cement (1924),17 is a pioneer in this type of literature. Gleb Chumalov, former worker in a cement plant, comes home in 1921 after the Civil War and finds the plant long since closed. Through his energy and initiative, the plant is set in motion and Chumalov becomes its manager. Now begins his new psychological development, somewhat hazily presented. Clearly shown, however, is another representative of the new rising stratum of Communist administrators and managers, the chairman of the executive committee of the local Soviet, Bad'in. Also a former worker, he is strenuous, cocksure, hard, and somewhat disdainful of 'romantics of the Revolution,' as he calls Chumalov in a friendly way. Dur17 Novels are cited according to date of first publication, which in some cases was in serial fonn.

· 114

MANAGEMENT IN INDUSTRY

ing the years of industrial recovery, many industrial chiefs were drawn from such human material. At this time factory managers were chosen chiefly fr0111 among workers who had played an active role in the local labor movement, often in the same factories, since the beginning of the Revolution or even before. It is characteristic that only seldom were they former leading members of the labor movement. In the beginning of the twenties the old leaders won higher PQsts-in general administration, in the economic, political, and military machines, etc. To manage factories became the task of those former corporals of the labor movement who, like Bad'in, were ready to sacrifice the special and immediate labm interests to 'the factory,', the 'national economy,' 'the State.' Chumalov, lacking this hardness, also lacked inner firmness to oppose the dominant trend. He let the current carry him along and never became a genuine manager. We shall meet him again at the beginning of the thirties in Gladkov's Energy, as Assistant Manager during the construction of Dnepr dam, where his special task was to maintain good relations between the administration and the workers. Here he seems to be more of an official than a leader. Gladkov long remained l'ather isolated in his attempt to make an industrial enterprise the center of a novel, but approximately since 1928-9 authors have taken a growing interest in industrial plants, especially those in construction. Typical subjects have been a great paper factory in Leonid Leonov's Sot' (1929), the gigantic Dnepr electric power sution in Gladkov's Energy (2 vols., 1932-8), the Magnitogorsk plant in Valentin Katayev's Time, Forward! (1932), the Kuznetzk plant in Il'ya Ehrenhnrg's The Second Day (1933), the Stalillgrad tractor plant in Yakov Il'in's Tbe Great Conveyer (1934)' This choice of themes was not accidental. At this time it waS scmi~officially suggested that recognized writers study the construction of large plants and depict them fictionally with some changes of names. In most of the above-named novels, we see managers of plants in construction and in production, at work and at home. The exposition is

PLANT MANAGERS

only formally fictional. Aside from that of Ehrenburg, which happens to be of no importance for our purposes, the sole piece of pure fiction is that of Leonov; nevertheless, as the work of a master, it is of great value for a knowledge of modern Russia. Different from Chumalov and more like Bad'in, is Uvad'yev, manager of a projected paper factory (Sot'), a former worker, later foreman of a paper factory. The factory is being constructed in economically virgin country, and Uvad'yev is alien, almost hostile, to the peasant environment. He does not consider people as such; for him they are only material for the gigantic process of industrial recovery, only 'man power' for the factory and its construction. When he finds it necessary to proceed as a 'hardhearted khozyain' (the word corresponds almost exactly to 'boss'), he does so without imler conflict. At the beginning of the first Five Year Plan, it was deemed an asset in a Communist manager to be a 'hard khozyain.' Zharkov, in Leningrad by Mikhail Chumandl'in (1932), a former worker, later secretary of a Communist factory cell, now manager of an industrial trust, tells a friend with some defiance and characteristic exaggeration, 'Between us we know we cannot be frightened even if the bones should crack,' even if the worker 'has it three times as bad as in the old days.' In Morning Begins in Moscow by Leonid Ovalow (1936), Yartzev, a worker during the first Five Year Plan, is so captivated by his later managerial role that he does not shrink from conflicts with the most devoted workers; the author adds conciliatingly: 'This was overdoing it. Yartzev understood this, but he was seized by the exciting universal love of the machine . . . A young khozyain!' Ignatov, manager of a tractor plant (Tbe Great Conveyer), a former fitter and sailor, had distinguished himself on the Civil War front; later a Party and Che-ka worker, he was transferred to economic worle at the end of the NEP, first as construction manager of a tractor plant and then as plant manager. He is resolute, rough, opinionated, extremely self-confident. 'SovietChicago will be created here and I, Ignatov, will construct this

116

MANAGEMENT IN INDUSTRY

Chicago.' The word'!, occupies an important place in his vocabulary. He has a powerful will, inexhaustible energy, is without personal interest, knows nothing but his work. An engineer in the plant characterizes him as 'a talented barbarian.' He belongs to the type of primitive revolutionary adventurer which rose to industrial leadership. He does not understand that a modern complicated plant cannot be directed by brutal methods; he fails and is replaced by a former mechanic, Barkov, who had worked in the economic administration since 191 S. During the twelve years he worked in six provinces, held ten positions. He was chairman of a provincial Economic Council, chief of municipal enterprises, manager of various plants. He was accustomed to consider himself an organizer and administrator, devoted to political and administrative affairs; technical affairs were the province of engineers. He became a typical man of routine,. without personal will, anxious only for the favor of superior authorities. 'Let it cost what it may, the tractors must be constructed.' Finally, he also fails. From Moscow comes as an interim manager, the chief of the country's automobile and tractor industry, Seliverstov, an old Bolshevik and an outstanding engineer. He succeeds in regularizing work by eliminating the feverish speed-up (sbtur71z0Vshchina, the 'storming-craze') and creating order. But his personality remains indistinct: Soviet authors in general have not succeeded in portraying outstanding engineers as old Bolshevikse.g. Baleyev, constructor of the Dnepr hydroelectric station in Energy, the assistant manager of Magnitogorsk, Nalbandov in Time, Forward! They are schematic, not living men. Younger engineers are presented more convincingly. Their rise to leading positions in plants began with the Five Year Plan, but in none of the novels of recognized writers do we see a young engineer as plant manager. Pel'haps this is to be explained by the predominant interest of writers in large enterprises, whereas

PLANT MANAGERS

117

young engineers began their rise as managers in medium-sized and smaller enterprises. But in almost every novel we meet young engineers as chiefs of sections or in similar posts in large plants. Mere boys of fifteen to seventeen at the beginning of the Revolution, they were carried along by the current, later passed through the school of the Young Communist League, participated in the late twenties in the struggle inside the Communist Party (Stalin's fight against right and left 'deviations'), and finally accepted Stalin's policy, less out of political motives than because Stalin became, for them, a symbol of the new order with its prospect of great industrial expansion. Some came from a worker milieu, many from peasant homes, but most of them from the urban middle classes, although often before entering college they had spent one or two years as manual workers. Incidentally, during the nventies and the first half of the thirties, this was the natural road to higher education for middle-class youth. These young engineers were a restless element, inclined toward experimentation, record-breaking, speed-up, 'storming.' They brought elan into the plants, a sense that people somehow become embodied in the gigantic recovery of the new revolutionary country through work in which they submerge themselves completely. Confident of advancement, but largely not conscious careerists, they saw their rise as a natural consequence of the development of the young country. Hence their social optimism and blindness toward new social inequalities. We meet these young engineers in almost all novels portraying industrial plants at the beginning of the first Five Year Plan. In Time, Forward! such an engineer, Morgul'yes, is the center of action; in Tbe Great Conveyer there is a whole group of such engineers. At the end of the first Five Year Plan, many will become plant managers. Many novelists show special interest in 'old' engineers in leading posts. This is probably to be explained by the complex situation faced by such men in plants. In Cement we see the prerevolutionary leading engineer, Kleist, who becomes technical director of the re-established plant. He is alien, perhaps hostile, to

lIS

MANAGEMENT IN INDUSTRY

the new political system, but his interest in the work outweighs everything else and he is loyal and tireless. This trait is peculiar to most important engineers in novels depicting the period of industrial recovery. The feeling that they are playing an active part in economic rebuilding, that they are the real creative force of industrial recovery, influenced many of them. This spirit found expression in the words of engineer Gabrukh in Sergei Semenov's Natal'ya Tarpova (1928): 'The men of October, at the head of the countl'y, began to do the same work, practically, that the non-Party engineer, Gabrukh, would do in their place: they are building the country up anew.' This alone, and no assumption that the country is developing 'in a socialist corset,' is of interest to Gabrukh. He is convinced that 'tomorrow will show them [Le. the Communists] for whom they have worked.' The idea that, in a country with nationalized industry, economic and especially industrial progress must increase their social importance was widespread among engineers and softened the 'anti-Bolshevism' of the older men. A singular kind of Soviet patriotism sprang up in this milieu, with special emphasis on the dignity of labor. 'Only work, only the accumulation of values, can save Russia,' says the non-Party engineer, Forst, in Pilnyak's Machines and Wolves (1925), and he gives his hand to the Communist, Lebedoukha, with the words, 'we must travel the same path.' Another engineer in the same novel, Roschislavski, welcomes 'the black hand, hard and steely,' which could 'grip Russia and the Russian muzhik, bring order out of the Russian chaos'; this hand has seized everything by the throat; 'it will build-do you hear?-build!' It was this feeling and this mood that produced a certain unrest in leading Soviet circles and led to the 'wrecker'. trials. After 1929. the 'wrecker' engineers were also portrayed in novels, but they were largely caricatures, not living men. An exception was one in The Great Conveyer. Stavrovsld, senior engineer, later assistant manager of a. tractor plant, is a convicted wrecker. He was the alleged head of wrecking work in the whole automobile

PLANT MANAGERS

119

and tractor industry. Even now in the plant he is under the special supervision of GPU agents. But, while not concealing his disapproval of the fanaticism of the prevailing speed-up, he works with devotion. Before the court he 'confessed'; the author does not dare doubt his guilt. But when the chief of the Supreme Council of National Economy, Ordzhonikidze, visits the tractor plant, he expresses the greatest confidence in: Stavrovski and guarantees his unconditional and complete amnesty.i8 The wrecker trials left bitterness in leading engineering circles. Energy presents a highly trained and energetic engineer, Kryazhich, directing the construction of the Dnepr electric station. He was nearly involved in a wrecker trial. In a conversation with the leader of the local Party organization, he says bitterly: If I am humiliated, if I have no equal rights with you, if at any moment I can be crushed and destroyed-what shall I call this? . . . If anyone can push his dirty hand under my nose and boast of his proletarian origin as if it were a Masonic symbol, then I have a right to protest and defend myself . . . If socialism is built on such filth, on such arrogance-I reject such a socialism.

::If course, it is possible that among the engineers were some real wreckers, but they were undoubtedly few. And wrecldng as a mass phenomenon involving a large number of engineers, such as was officially alleged during the first Five Year Plan, surely did not belong to the world of realities. In the mid-thirties the question had evidently lost its importance. The dualism, manager-technical manager, had, on the whole been surmounted. New problems of industrial management arose. c.

LATER DEVELOPMENTS

The mid-thirties must have appeared to factory managers as a brilliant period. A great number of gigantic new industrial plants 18 The mechanism of the 'confessions' of the wrecker engineers is shown in the book of a former Yugoslavian Communist, A. Ciliga, The Russian Enigma (London, 1940)' Ciliga had an opportunity to become acquainted with many wreckers in a Leningrad prison.

IZO

MANAGEMENT IN INDUSTRY

were already in operation, others were in construction, and the immediate future promised tremendous industrial expansion. The names of the managers of the larger plants were among the best known in the country. There were no more Ignatovs and Uvad'yevs, no more Morgul'yes, or the like, such as we met some years earlier. Early in the thirties arose a type of plant chief who combined the traits of both groups. The position of these managers appeared brilliant, their future secure. But at the end of 1936 the situation was painfully altered. From the last months of 1936 until well into 1938 a change, broader and more radical than in 1928-9, took place in the leading industrial personnel. Most important industrial chiefs were replaced by new men. They were not only new individuals, but also new types, men of new backgrounds, experiences, and attitudes, who probably even represented a new social stratum, one not consolidated but in process of formation. This turnover of industrial chiefs came about by means of the great 'purge.' It began with the Zinov'yev-Kamenev trial in August 1936, reached its highest point in the P'yatakov-Radek trial in January 1937, and led to the elimination of the larger part of leading officials in the State administration and the Communist Party. Not hundreds, but many thousands were victims of this purge. In every even moderately important enterprise and office, in leading circles of the government, and in the Central Committee of the Communist Party, the purge was felt. The replacing of chiefs of industrial plants by new men was only one aspect of this social upheaval. Its broader aspects-historical roots, inner motives, sociological significance-cannot be analyzed in this study. Here we, are interested only in the way in which the purge operated in industrial plants, how it affected the formation of a new industrial leadership. As in 1928-9, the losing group was politically discredited. But now defamation was practiced with greater ruthlessness. As we have seen, wreckers sentenced in 1928-9 could sometimes continue to work in plants, although under special supervision. Often

PLANT MANAGERS

I2.I

officials did not take convictions seriously. But in 1936-8 accusations led to much more serious punishment. Furthermore, the charges now were raised not only against engineers, as in 1928-9. but almost everywhere. The new industrial chiefs were young men, often scarcely out of school, with a better and more systematic education than most of the 'Red specialists' who preceded them. They were more interested in their profession, less in political problems. Most of them leaned toward authoritarian thinking: the supreme leadership (Stalin and those closest to him) decides on right and wrong; what it decides is incontrovertible, absolute. Thus, complete devotion to Stalin. It would be undue simplification to explain this devotion merely by the fact that the system represented by Stalin made possible the rise of these people. It had deeper roots. They had been young Communists who ripened intellectually as the opposition within the Communist Party was being broken and defamed and :J. Stalin cult systematically' developed. Stalin was, for them, the embodiment of economic progress and a strengthened international position. They accepted as natural the fact that industrialization and rearmament were dearly paid for, that the bulle of the toiling masses remained in dire want. They were educated to the idea that a society with a developed industry and without a capitalist class corresponds, ipso facto, to the ideal of a 'classless society,' and that to strive for social equality would be mere 'petty bourgeois leveling.'].9 The interest of the new men was less in social problems than in a strong State to build a national economy. Not only did the influx of workers and workers' children into collegiate institutions fall off markedly after 1933; promotion of 19 Soviet Labor Law, a college textbook published by the People's Commissariat for Justice (Moscow, 1939), describes the tendency to equalize wages of skilled and unskilled workers as a feature of capitalist countries, and emphasizes the socialist character of wage differentials; 'petty bourgeois egalitarianism in wage rolicies is the worst enemy of socialism.' Incidentally, neither 'leveling' nor egalitarianism' can render the contemptuous, slangy sound of the Russian word used, uravnilovka.

122

MANAGEMENT IN INDUSTRY

workers directly from the bench into administrative positions was almost stopped in the second half of the thirties. Outstanding workers were now given higher wages, bonuses, and the like, and in their social and material position were elevated high above the majority of workers, almost to the level of higher ranks of plant employees and engineers. But they remained manual workers. By this time relatively few of these favored woi'leers saw the way open to higher education, saw a prospect of rising to industrial leadership. Lost was the idea of putting management into the hands of men rising from the working class and bound to labor, formulated at the end of the twenties. The order to assure a workers' nucleus in colleges and technical schools had been forgotten. Through a decree of the Council of People's Commissars of 2 October 1940, scholarships were limited to outstanding students, those with not less than one-third 'excellent' examination marks and no marles below 'good.' This measm"e, while tending to raise the level of college education, was bound to have a social effect. As there were no scholarships in secondary schools, the poor had a relatively small chance of getting 'excellent' marks. Hence the new restriction on college scholarships diminished their chances of obtaining a higher education. This tendency was strengthened by the simultaneous introduction of fees in secondary schools (8th, 9th, and loth grades of elementary schools), technicums, and colleges (fees range between 150 and 200 roubles a year in high schools, 300 to 500 in colleges).2o The social effect of these measures is further illuminated by a simultaneous decree of the Presidum of the Supreme Counci~ introducing compulsory vocational education of boys from fourteen to seventeen. After training of six months (for boys of sixt~en and seventeen, to teach them the tasks of a 'semi-skilled' worker), or of two years (for boys of fourteen and fifteen, to teach them the tasks of a 'skilled' worker), young men are bound 20

Decrees of :z and

11

October 1940j Laws and Ordinances, 194°:637, 676.

PLANT MANAGERS

12 3

for four years as manual workers in enterprises chosen by a special authority. This compulsory vocational training (and consequent compulsory labor) is not general: 800,000 to 1,000,000 boys are 'mobilized' annually for vocational schools, but students of high schools and colleges are tacitly exempt. 21 Whatever the motives of these decrees, they would, in effect, emphasize the social-privilege aspect of higher education. Future industrial chiefs would grow up from school days with a feeling of social superiority. It is characteristic of recent developments that young engineers are increasingly promoted not only in industrial plants but everywhere, and especially in Communist Party offices and general administration. The important role of engineers and technicians was brought out directly by the last general election campaign within the Communist Party (1938). 'A new favorable phenomenon must be especially mentioned,' said the Moscow Party Secretary, Ugarov, at the Moscow Party conference: 'A great number of engineers and technicians work in the Party.' 22 Similar remarks were made at the Congress of the Communist Party of the Ukraine by its First Secretary, Khrushchov. 28 Newspapers published frequent reports of the election of engineers lind technicians to secretaryships of Party organizations in plants. Some engineers even entered the government of the U.S.S.R. There are today twenty-five People's Commissariats for industry,24 many headed by young engineers, some of whom rose to these positions directly from the office of plant manager. Engineers today constitute approximately one-third of the Council of People's Commissars. And although its members have, on the 21 Iz'l1estiya, 3 October 1940. The census of January 1939 showed for the entire Soviet Union 13,336,000 persons of ten to fourteen years of age and 15,124,000 of fifteen to nineteen (lzvestiya, 29 April 1940)' Thus we can estimate the number of boys and girls of fourteen to seventeen at about 12,000,000, the number of boys at about 6,000,0 00. 22 Pravda, 31 May 1938. 2B Pravda, 16 July 1938. 24 See Chapter I.a.

MANAGEMENT IN INDUSTRY

whole, less political power than English or even American Cabinet members, this development strengthens considerably the social consciousness of engineers in leading positions in industrial plants. The social process described above is far from completed. It was in full tide when the German-Russian war began. The war may deflect it, but a knowledge of social change in the last years before the war can, perhaps, facilitate an understanding of coming events.

PART II MANAGEMENT OF COLLECTIVE FARMS

x The Kolkhoz: A New Production Form

1

T

HE kolkhoz, or collective farm, is a new form of productive organization in agriculture. Before embarking on a study of the management of kolkhozes,. it is necessary briefly to review their development and to describe their peculiar structure. The first voluntary kolkhozes were organized in the early days of the Revolution, when the land belonging to the rural gentry, monasteries, churches, etc., was nationalized and turned over to the peasants for cultivation. Rapid liquidation of large agricultural enterprises and division of confiscated lands among the peasants proceeded simultaneously with a parceling even of small peasant holdings. Two circumstances were chiefly instrumental in this process: the economic collapse of the cities and the possibmty of obtaining an allotment of land attracted urban elements which had not yet lost their ties with the village. In the redistributions of land, which during the Revolution were repeated almost yearly, they too received plots, according to the number of workers or heads in a family depending on the district. The Soviet government, which, to feed the cities, systematically extracted grain and other agricultural products from the village, was particularly heavy on the owners of larger farms. This policy contributed to subdividing larger farms, owned by large families, into smaller independent holdings. This process of dividing agricultural enterprises that even 1 For further details on kolkhozes see A. Yugow, 'The Collectivization of Agriculture in the U.S.S.R.' in the International Labor Review (September 1932.), vol. z6, no. 3. and Russia's Economic Front for War and Peace: An Apprairal of the Three Five Year Plans (New York, 1942).

12

7

MANAGEMENT OF COLLECTIVE FARMS

128

theretofore had been on the whole extremely small resulted in a rapid decrease in the amounts of goods which farms could spare for city needs, i.e. a decrease in agricultural production for the market. Petty farmsteads, poor both in capital and in technical equipment, were barely able to provide minimum subsistence for peasants and their families. As a result, the leaders of Soviet economy and, to some extent, the active elements of the peasantry began seeking an organizational form of production which would allow small peasants to avail themselves of the advantages of large-scale enterprise: rational crop rotation, machines, processing and storage facilities, and direct sale to city markets. There followed a trend toward cooperation. Co-operatives in home industries, credit, and marketing had existed throughout the country even before the Revolution of 1917, and were particularly widespread in the Ukraine, northern Russia, the Urals, and Siberia. On the outbreak of the war in 1914 there were about 4,700 co-operative societies in Russia for the processing and marketing of agricultural products.2 In addition, there were approximately 1 1,000 rural consumer cooperatives. The total co-operative membership at that time was more than 2,000,000 persons. As early as 1918 there appeared the first collective farms with various degrees of pooling of property, implements, and la.bor. Many of these were established on nationalized large estates, which local government agencies placed at the disposal of the peasants for collective cultivation. These early lcolkhozes generally took the form of simple cooperation for the joint acquisition and use of complex machines (multiple metal plows, reaping machines, etc.). They were called 'societies for joint land cultivation' (toz). Land remained the property of individual owners who were toz members, and the output of each parcel belonged to its owner. Livestock and the 2

A. Lozovy, Agricultural Co-operation and Its Significance (Moscow,

I9 2 3)·

THE KOLKHOZ: A NEW PRODUCTION FORM

129

smaller implements also remained outside co-operative ownership. Pastures, however, were often used in common. Another method of collective farming was the agricultural 'artel.' Here the land, heavy tools and machines, farm buildings, and work allimals Wefe held in common. Individual land holdings were lumped together, subdivided into fields according to crop, and worked collectively. The total output was divided among members according to eithcr labor, or shares, or the number of workers, or the number of consumers. There were, finally, agricultural 'communes,' which organized collectively not only thc production, but also members' consumption. All implements, machines, livestock, and buildings were owned by the commune; members lived in communal homes, with communal kitchens, nurseries, etc. Most of such agricultural communes were organized by workers who had come from the cities. According to the Agrarian Institute of the U.S.S.R., collective farms were composed mainly of the poorer rural elements. In pru:ticular, the poorest peasants joined the communes, since they had almost no private property to begin with. In 1928, 70.9 per cent of the membership of communes were landless peasants, 74-3 per cent owned no horses. Of toz members, only 29-4 per cent were landless and 48.1 per cent horseless. s Although, from the outset, the kolkhozes had government support (tax exemptions, credits, subsidies), they were but slowly adopted into the agricultUl'al economy of the country. Despite the advantages or large-scale mechanized agriculture, in the majority of cases the kolkhozes did not efficiently organize production. This was partly because of lack of experience in the leadership, but chiefly because of internal frictions and conflicts arising as a result of unfamiliar forms and methods. Of the various forms or collective organization, the communes proved the least viable. Struggling with problems of production and complexities of 8 People's Commissariat for Agriculture, The Kolkhozes of the U.S.S.R. (Moscow, 1929), p. 40.

13 0

MANAGEMENT OF COLLECTIVE FARMS

communal living, they frequently survived only by virtue of government aid. Gradually they died out. The most widespread and successful of all kolkhoz forms was the toz. In 1927, communes accounted for 9.0, tozes for 42.9, and artels for 48.1 per cent of all kolkhozes; by 1929, communes had dwindled to 6.2, artels to 33.6, while the tozes had increased to 60.2 per cent. During the first years of the Revolution, the number of kolkhazes of all kinds increased. During the NEP the increase was first slowed down, then, as private farming regained a foothold, the number of kolkhozes began to diminish. In 1918 there were 1,600 kolkhozes, comprising 0.1 per cent of all farms; in 1921 there were 16,000 kolkhozes, comprising 0.9 per cent; in 1925 there were 21,900, comprising 1.2 per cent; and in 1927 there were 14,800, comprising 0.8 per cent:l Thus we see that the kolkhozes of 1918-28, organized along the lines of voluntary co-operation, embraced but an insignificant percentage of the peasanuy and never played a large role in the rural economy. If, at this same time, agricultural production was restored to a certain degree, improvement was slow because the process of the subdivision of farming units continued dlU'ing the years of the NEP. This was a result both of the natural increase in population, and of the 'anti-kulak' policy of the government. Before the Revolution, the annual percentage of farms subdivided did not exceed 1.7 per cent. During 1917-28, it nnged from 2.3 per cent to 3.5 per cent. The number of individual farms rose from 18 million in 1917 to 25 million in 1928.5 The relative rehabilitation of rural economy waS undoubtedly aided by the abolition (in 1921) of the compulsory requisitioning "Central Statistical Office, The Kolkbozes in tbe Second Five Year Plan (Moscow, 1939), p. I, and Socialist Agriculture of the U.S.S.R. (Moscow, 1939), p. 4 2 •

liP. Lyashchenko, Russian Grain Farming (Moscow, 1927), p. Kolkhozes of the U.S.S.R.,

p. 44.

ro.

The

THE KOLKHOZ: A NEW PRODUCTION FORM

13 1

of farm products (which meant, as Lenin explained, that 'the peasant must surrender to the government every pood of grain not essential for the maintenance of his family, for cattle feed or for seed' 6) and its replacement by fixed levies in kind. But the government did not go so far as to adopt a definite policy of encouraging the economically strong peasant elements. During the .last years of the NEP, general agricultural production and, particularly, production for the market remained stagnant or decreased. In 1927, despite the relatively high total yield of grain, the countryside gave the city only 37 per cent of the grain usually marketed in pre-Soviet days. In spite of very severe government decrees, the marketing of animal products and of agricultuml raw materials needed by industry decreased. In 1926-7 the ratio of marketed agJ."icultural goods to total output was, in flax, 66 per cent of the corresponding pre-war ratio (1913); in leather, 82 per cent; in poultry, 58 per cent; in wool, 46 per cent.'l This decrease in production for the rnar1{et had its chief roots in the size of farm units and the structure of agrarian economy. Even before the First World War, peasant holdings were incapable of providing subsistence to owners, who were compelled to go to cities to work or beg. The great mass of small peasant holdings had been opel'ated on a level close to primitive subsistence. Production for the market had been carried on chiefly by the middle and large peasant farms and by landed estates. Lack of space prevents citation of detailed data on the extent of market production, which varied with crop, region, acreage, availability of livestock, etc. S On the basis of his studies of agricultural production over a long period in many regions of pre-Soviet Russia, KOlldrat'yev established that for all regions and crops the marketed proportion of output of landed estates and large peasant 6 V. I. Lenin, Collected Works (Moscow, 1932), XV: 332. A pood is an old Russian measure of weight, equivalent to 36.II3 pounds. 1 N. Kondrat'yev, The Grain Market (Moscow, 19~7), p. 14; Economic Life, 3 May 19 2 7, 8 N. Oganovsld, Outlines of Russian Economics (Moscow, 1923), pp. 10 5-6.

I32

MANAGEMENT OF COLLECTIVE FARMS

farms was considerably higher (2 to 3Yz times) than that of middle and small peasant farms. 9 The figures of the Central Statistical Office of the U.S.S.R. give an approximate idea of the relation of market production to size of enterprise. Before the First World War the average market production of grain of large landed estates in Russia comprised 47 per cent of their total output, that of large peasant holdings 34 per cent, and that of small peasant holdings, only 11.2 per cent. 10 The liquidation of large landed estates and large-scale peasant farms, which had supplied the market with over 35 per cent of all marketed grain, and the continuous subdivision of peasant holdings were not alone responsible for lowered market production. The Soviet government persistently strove to appropriate agricultural products through compulsory requisitioning, high taxes, or the creation of price disparities between agricultural and industrial goods (the so-called 'scissors'). This policy served to deprive the peasants of all incentives to expand market production. The agrarian revolution of 1917 abolished the privileges of the nobility and the church and gave legal equality to the peasants. But it did not succeed in solving the ptoblem of poor harvests and chronic crop failures. Nor was it able to solve the problem of supplying urban food needs. New radical agrarian reform was imperative if the level of agricultural productivity was to be raised sufficiently to improve the standard of living of both city and village. This could be done only if Russia were to abandon primitive forms of agriculture for modern methods. The antiquated three-field system had to give way to modern crop rotation, the wooden plow and flail to the metal plow and threshing machine, extensive methods to intensive methods. On the other hand, there was required a government policy that would encourage broad economic development in agriculture. The policy of zigzags and half-hearted concessions pursued by 0p. cit. pp. 211-13. June 1928.

o Kondrat'yev, 10

Pravda,

1

THE KOLKHOZ: A NEW PRODUCTION FORM

133

the government during the NEP period affected the economy advel·sely. It failed to stimulate the development of agriculture sufficiently or to supply the city adequately with the necessary material resources. Developments in the NEP period tended in the direction of solving the agrarian problem by the creation of a limited class of rich and powerful peasants at the expense of the rest of the village. But the Soviet government, ideologically and politically opposed to the creation of a rich peasantry, would not consistently encourage the development of individual farm ownership. It long vacillated between granting partial privileges to encourage rural development, and such policies as struggling against 'rent abuses and hired labor in the village,' and kulaks, i.e. peasants who owned two or three horses. In' 1929, the government decided to industrialize the nation and adopted the first Five Year Plan. This program demanded tremendous investments of capital, which, under Russian conditions, could be obtained only from the villages and only on condition of their rapid economic development. It was imperative to choose a definite economic policy. The encouragement of a 'strong peasantry' implied a corresponding distribution of national income and, consequently, a much slower rate of industrialization than that projected by the authors of the Five Year Plan. It would also confine the Revolution to agrarian reforms and political democratization, while considerably restricting in scope the socializing measures of the government. In the same year, after some hesitation and internal Party struggle, crowned by a surprising declaration of Stalin, which, in fact, contradicted the Five Year Plan, the victorious faction adopted complete socialization. It was decided to organize agriculture along the lines of highly productive, large-scale collective farming, as well as to establish sovkhozes (government farms), and to abolish individual peasant farming within the shortest possible time. The first Five Year Plan called for the collectivization of only 18 per cent of all land under cultivation. There be-

134

MANAGEMENT OF COLLE:CTIVE FARMS

gan, however, particularly after Stalin's pronouncement 'on transition to the policy of liquidating the kulaks as a class' and the subsequent decision of the Central Committee of the Communist Party 'to carry out full collectivization,' such a rapid process of compulsory collectivization that, by the end of the Five Year Plan, more than two-thirds of all land under cultivation had been collectivized.l l Both in organizational methods and tempo, compulsory collectivization begun in 1929 was completely unlike the collectivization of the first Soviet years. The new policy, both painful and ruthless, aroused stubborn resistance on the part of broad sections of the peasantry and was carried out at the cost of millions of peasant lives and the destruction of vast national wealth. The government accomplished the task by ruthless coercion. Relying on the poorest strata of the village, the landless, the horseless, the chronically starved; utilizing their hatred of the village 'rich' and their longing for a. better life; applying all forms of administrative and economic pressure-it succeeded, in the course of several years, in liquidating individual peasant farming and making the kolkhoz the dominant economic form. In 1929, 3.9 per cent of former individual peasant farms and 4.9 per cent of cultivated land area were collectivized. By 193 I, 52.7 per cent of peasant farms and 67.8 per cent of cultivated area were collectivized. By 1935 the kolkhozes embraced 83.2 per cent of all farms and 94. I per cent of all cultivated land. In 1940 they embraced 96,9 per cent of all farms and 99.9 of all cultivated land. 12 It may be said that, on the outbreak of the Russo-German war in 1941, collectivization of agriculture had been fully accomplished. 11 Gosplan, Five Year Plan for t'~e Development of the National Economy (Moscow, 1929); Stalin's speech to the conference of agrarillO Marxists, 27 December 1929, in Pravda, 29 December 1929; decision of the Central Committee of the Communist Party, 5 January 1930; decree of 1 February

193 0• 12 Central Statistical Office, Socialist Construction in the U.S,S.R. (Moscow, 1936), p. 85. Problems of the Economy (1941), No. I, p. 34.

THE KOLKHOZ: A NEW PRODUCTION FORM

135

When it embarked on the policy of mass collectivization, the Soviet government decided to promote the artel as the collective form best suited to the economic and cultural level of the country and to Soviet policy. The process of converting communes and tozes into artels was rapid. In 1929 tozes comprised 60.2 per cent of all collectives, communes 6.2, and artels 33.6 per cent; by 1934 communes comprised but 1.8, tozes 1.9, and artels 96,3 pel' cent of all functioning kolkhozes. The government aimed not only to raise agricultural productivity, but also to strengthen its own rural economic position. From their inception, kolkhozes required government assistance, both in financing and in obtaining machinery. Government aid was given in the form of loans, seed, and machines. In 1930, a new policy was adopted. Instead of distributing tractors, threshers, and other machines directly to kolkhozes, the government set up Machine-Tractor Stations to service the kolkhozes. At first these were organs of the kolkhozes. In 193 I, they became joint enterprises of the lcolkhozes and the government. In 1932 they were transformed into purely government organs, servicing collective farms with tractors and combines at fixed fees. When the government decreed that all large machines servicing kolkhozes be concentt'ated in Machine-Tractor Stations, it became the owner of all the instruments of production, rural as well as urban. In the rural areas it now owned both the land and all large machines. The kolkhozes were thus placed in a position of even greater economic dependence on the government.18 In 1930 there were 158 Machine-Tractor Stations in the U.S.S.R., servicing 27.4 per cent of all kolkhozes. In 1940 there were 6,980 stations, servicing 94.5 per cent of all kolkhozes. Kolkhoz land belongs to the government and cannot be alienated by the kolkhozes or their members. It is attached to: the kolkhoz for permanent use. Work animals are kolkhoz property. Cattle and poultry belong in part to the kolkhoz, in part to indi18 Economic Institute of the Academy of Sciences. The Development of Soviet Economy (Moscow, 1940), p. 384'

136

MANAGEMENT OF COLLECTIVE FARMS

vidual members, within limits set by law. Productive machinery, with the exception of small tools, belongs, as already mentioned, to the government, which, by agreement, works the land and harvests for the kolkhozes. Labor is furnished by the kolkhoz, which, in addition, is obliged to assign a specified percentage of its manpower to certain compulsory tasks (road work, transportation, felling timber, etc.) and to work in urban factories. 14 The product is divided between the kolkhoz, its individual members, and the government. The last-named takes its share in various forms. In addition to compulsory deductions in money and kind, there are fees for the services of Machine-Tractor Stations, and direct and indirect taxes. The kolkhoz receives its share in the form of allocations to compulsory funds and reserves. The individual kolkhoz member receives his share 15 as compensation for labor; the amount of compensation depends on the size and profitableness of the kolkhoz as a whole. In addition to collective worle, there is a field of enterprise in lcolkhozes in which private-property factors have a broad opportunity for development. Each household is granted a plot of land for individual cultivation. Generally these small homesteads are cultivated intensively, and all income from their output belongs to their holders. These homesteads do far more than provide for the fuller satisfaction of peasant consumer needs. Within a short time they have become an important part of the national economy, supplying a good deal of the meat and dairy products, vegetables, fruit, poultry, honey, and eggs. During the first years of compulsory collectivization, kolkhozes varied greatly in size. The majority consisted of five or six households, cultivating fifteen to twenty hectares. There were also giant kolkhozes of thousands of households, with tracts of cultivated land up to 2,000 or 3,000 hectares in area. The size of the kolkhoz depended largely on the speed of and forms assumed by compulsory collectivization in the particular region. U

16

See Chapter III.b. See Chapter xv.

THE KOLKHOZ: A NEW PRODUCTION FORM

137

It soon became clear that small koll{hozes were not profitable and that giant kolkhozes did not lend themselves to efficient management. By 1938 the average kolkhoz comprised 78 households and 484 hectares of land under collective cultivation. Size varies with region, depending on crops and specialization. Ukrainian kolkhozes, producing mainly grain or cattle, are the largest. In 1935,65.2. per cent of all Ukrainian kolkhozes covered more than 500 hectares; and I.I per cent, less than 100 hectares each. The smallest kolkhozes were found in Georgia (grapes, medicinal herbs, tea), where 65.8 per cent of all kolkhozes covered less than 100 hectares, and only 1.8 per cent more than 500 hectares.1o In recent years, kolkhozes have been the chief form of agricultural enterprise in the U.S.S.R. According to data for 1937, they produced 62.9 per cent of total agricultural output, State farms 9.3 per cent, homestead plots 21.5 per cent, workers' suburban plots 4.8 per cent, and individual independent peasants 1.5 per cent. In 1938, kolkhozes produced 86 per cent of all the grain, 30-35 per cent of all the livestock and animal products, and 90-95 per cent of all cotton, sugar beet, flax, and oil-yielding crops. IT Despite ruthless and coercive methods of collectivization, which aroused much bitterness against the kolkhozes, reorganization of the entire agricultural economy along the lines of large mechanized enterprises using advanced methods has begun to yield positive results. The agricultural output is rising, land productivity has improved, livestock breeding has begun to recover, rural production for the market has risen, and extreme fluctuations of crop yield, formerly habitual in Russian agriculture, have considerably abated. The average annual grain crops in p1illions of tons were 16 T.

p.27·

Basyuk, Y1Je Organization of Socialist Agriculture

(Mo~cow, 1939),

IT Central Statistical Office, Socialist Agriculture of the U.s.S.R. (Moscow, 1939), p. B7j Gosplan, Agricultural Economy (Moscow, 1939), p. 114. All figures are in metric tons and refer to the territory of Soviet Russia as of 1938.

MANAGEMENT OF COLLECTIVE FARMS

67.6 in 1910-14; 73.6 in 1928-32; 94·5 in 1933-7; 95 in 193 8 ; in 1939; and 119 in 1940.18

110·3

The kolkhoz has been economically consolidated; it is the new and predominating form of the life and work of the Soviet peasantry, the overwhelming mass of the population of the U.S.S.R.ID 18 Ministry of Agriculture, 'Report of the MinistLY of Agriculture,' in Statistical-Economic Data on Russian Agriculture (Petersburg, 1916); Bulletin of Soviet Russian Economics, edited by S. N. Prokopovich (Prague, April 1934; Geneva, December 1940); Socialist Agriculture of the U.S.S.R. (cited above), p. 61; Report of Voznesensld, Chief of the Gosplan, in Pravda, 19 February 1941. There arc many reasons for believing these official figures on crop yield to be exaggerated. Prokopovich says they should be cut by 10 per cent beginning with 1933. But no reasonable corrective coefficient can alter the conclusion that, in comparison with 1910-14, the crop level has risen and that grain yields tend to rise steadily. 19 Of the policy of Gemlan authorities toward kolkhozes in occupied Russia, little is known. The scanty reports are in pan inconsistent. A few facts can, nevertheless, be established with some certitude. Collectivization contradicts the principles of National-Socialist l:md policy. In fact, however, Hitler's promise to abolish it was only partly fulfilled. In the territory incorporated Into the Soviet Union shortly before the Russo-German war (Latvia, Lithuania, Estonia, Eastern Galicia), the kolkhoz had not taken 1"00t when German forces occupied those lands. Here the Germans themselves generally undertook the administration of former private farms and estates, or returned them to their former private owners. But in the old Soviet territory (the Ukraine) private agricultural property was not restored. While a decree 'On the new order in agriculture' issued 27 February 1942 by Alfred Rosenberg. Reich Minister for the Ostlund, proclaimed the complete abolition of collectivization, it introduced 'agriculhlral associations' embracing the territories of the respective lwlkhozes. Each associa· tion was headed by a manager, appointed by German authorities. All ablebodied members of an association participated in plowing. sowing, and harvesting. Household plots became the private propeLty of the individual peasants. Sovkhoz.es and Machine-Tractor Stations were run by German authorities. The German press occasionally tried to explain the policy. 'To apply rigidly the principle of kolkhoz liquidation would mean a complete decline of agricultural production' (Ostdeutscher Beobachter, 28 February 1942). 'Elastic measures of transition are necessary' (Koelnische Zeitung, 3 March 1942). 'The new regulatory measures aim at conserving the capacity of Russian agriculture to produce surpluses for the population as well as for our soldiers and, in the future, for Germarty and the whole continent of Europe' (Pariser Zeitung, 9 March 1942). German economic policy-on the whole one of looting-warrants no permanent social or economic conclusion. There can be no doubt, however, that to maintain production the occupying forces had to abstain

THE KOLKHOZ; A NEW PRODUCTION FORM

139

from dismembering the kolkhoz fields or abolishing collective cultivation and harvesting. The liquidation of the kolkhozes proved a difficult problem. In the great Russian offensive of 1943, the Red army retook a large part of the territory formerly occupied by the Germans, and on 21 August the Council of People's Commissars and the Central Committee of the Communist Party passed a decree 'On immediate measures to rehabilitate economic life in the regions freed from. German occupation' (lzvestiya, 22 August 1943). The main aim of the decree is to effect a speedy and planned recovery of the kolkhozes. For this purpose the State organizes the return of evacuated livestock and agricultural implements, extends large credits to the lwlkhozcs, alleviates taxes, etc. On this decree see Economist (London), 25 September 1943.

XI

Constitution and Administration o organize kollchozes and to determine efficient methods of administration were difficult tasks. Socially and economically, kolkhozes were so new a form that it was impossible to organize them on the basis of experience in the administration of industrial enterprises, of large estates in Russia, or of large-scale farms in the United States. New forms of organization and administration had to be sought empirically. There were groping and serious blunders. Forms developed in the course of several years of practical work. The first kolkhozes (1917-28) arose out of the wishes of peasan.ts or on the initiative of local Communist organizations. They functioned either without fixed rules or with rules that, having been developed in the course of work, differed greatly from one kolkhoz to another, particularly in regard to the interrelation of co-operative and individual factors. In 1930, at the height of the effort toward 'full compulsory collectivization' and the drive against kulaks, the central organs of government developed the first set of statutes for kolkhozes. l These did not attempt to regulate internal life, but consisted of instructions on organization; a definition of eligibility for membership; a definition of kulaks (subject to confiscation); a definition of property of members subject to collectivization; and regulations of relations between kolkhozes and government organizations. These somewhat incomplete statutes, which served neither to regulate administration nor to protect members' interests, re-

T

I

Decree of

I

March

1930.

140

CONSTITUTION AND ADMINISTRATION

I4 I

mained in force until 1932. Then, after a period of sharp COthpulsory collectivization, a series of new decrees 2 was issued, substantially altering the internal administration of kolkhozes and reducing the arbitrary element in relations between kolkhozes and government. These decrees were dictated by a desire to consider the mood of the peasants and to strengthen their economic interest in improving kolkhoz work. They legalized the right of kolkhoz members to carryon homestead farming, in addition to participating in the work of the kolkhoz. They abolished collectivization of cows and poultry, permitted kolkhozes to sell 'surplus output' on the market, and established quotas for the compulsory delivery of produce to the government. At the same time, these decrees strengthened political conti·ol over the managerial personnel of the kolkhozes, and reduced interference by local Party and State organizations. In 1935, after the economic consolidation of the collective system, a 'Model Statute for Artels,' proposed by Stalin at the Second C011gress of kolkhoz shock brigaders, was adopted and subsequently ratified by the highest Party and government organs. s With slight modifications, this is the statute under which kolkhozes operate today. Changes and fluctuations in government policy toward kolkhozes (the drive against kulaks, the struggle against fictitious collectivization, distrust of the wealthier and reliance on the poorest rural elements, the rule of 'appointees,' direction by political bodies, training of leaders, etc.) have all affected kolkhoz forms and methods of administration. Having survived all these fluctuations, the kolkhozes have, since 1935, begun to function under relatively stable conditions, without sharp changes in organizational structure. Revolutionary conditions of compulsory col2 Decree of 4 February 19)2, 'On current legislative enactments for the organizational-economic consolidation of kolkhozcs'j decree of 10 May 1932; decree of 25 June 1932, 'On revolutionary law.' 8 Decree of 17 February 1935.

I4 2

MANAGEMENT OF COLLECTIVE FARMS

lectivization have been left behind, giving way to a period of evolution and internal consolidation. The Model Statute of I935 defines the legal status of the kolkhoz, the forms of its administration and organization, and its relation to other organizations. It is the 'supreme basic law, stabilizing agricultural production in the U.S.S.R.' 4 In a special decree, the Central Committee of the Communist Party and the Council of People's Commissars instructed Party organs that 'the Statute shall not only formally but in reality have the force of a basic State law. Violations must be severely punished.' 5 And, in fact, the Statute plays a supremely important role in the life of the kolkhoz, regulating all its activities and defining all its rights and obligations. Its definition of the kolkhoz as an independent, voluntary association of peasants is, however, entirely false. While the Statute provides that the kolkhoz be built on the basis of voluntary membership, the overwhelming majority of kolkhozes were organized through coercion. The government resorted to a variety of methods to achieve full collectivization, but administrative and economic pressures were decisive. The usual method of organizing kolkhozes was as follows: On the initiative of Communists, the poorer elements of a village adopted a resolution to organize a kolkhoz. The property of the well-to-do was then confiscated and turned over to the kolkhoz. Peasants who actively resisted were arrested and sent into forced labor. Those who, in various ways, tried to avoid joining were deprived of the possibility of buying industrial commodities and were subjected to special taxes. Peasants who joined the kolkhozes received tax exemptions and special privileges in marketing 'surpluses' and purchasing manufactured goods. In the light of these circumstances, kolkhozes can hardly be considered voluntary organizations. I Their operation is also subject to the strictest government con4

Bolshevik (1938), No. IO-I1, p. 18. of 19 December 1935.

B Decree

CONS"fITUTION AND ADMINISTRATION

143

trol and supervision. The government has not only imposed binding regulations but it also directs, through pedodic orders, their plans and operations, and maintains rigid control over their entire . administrative apparatus. The Statute of 1935, which is still in force, decrees the collectivization of all work animals, agricultural machinery, seed stocks, feed for collectivized livestock, and farm buildings needed by the collective. Dwellings, some cattle and poultry, and homestead farm buildings l'emain in the private ownership of individual kolkhoz households; smallel' farm tools needed on the homestead farm are not collectivized. Under certain conditions, a kolkhoz can expropriate a member's homestead farm. The land belongs to the State, but it is attached to the kolkhoz for permanent joint cultivation. Each member is granted a plot ranging from one-quarter to one-half a hectare in area for homestead and private use in gardening, small-animal and poultry breeding, bee-keeping and dairying. Each household may own a cow, one or two calves of horned cattle, pigs, up to ten sheep and goats, twenty hives, and an unlimited number of poultry and rabbits. In some regions variations are permitted in the area of the homestead farm (up to one hectare) and in the number of privately owned livestock. The kolkhoz consists of peasants of both sexes, over sixteen years of age, who personally participate in its work. On joining the kolkhoz, each peasant must surrender his large farm implements, stock of seed, and work animals. If he has sold his horses during a period of two years prior to joining, and possesses no seed, he must pledge himself to pay in installments, out of future income, the value of a horse and the required seed. The size of the admission share does not affect the member's income. A member's existence as an individual farmer is at an end. According to the Statute, he may leave the kolkhoz. In such cases his money share may be refunded and he may be compensated by the People's Commissariat for Agriculture 'out of land reserves only, and without damaging the lwlkhozes by land fragmenta-

144

MANAGEMENT OF COLLECTIVE FARMS

tion.' This means, in fact, that any member who leaves loses his entire land share (including the household plot) and the possibility of farming. The kolkhoz is now governed by the following bodies or persons: the general membership meeting, the Managing Board, the Chairman, the Control Commission, brigade and squad leaders, managers of livestock farms and other auxiliary enterprises, bookkeepers, and various specialists. The Statute of 1935 proclaims that the administration of kolkhazes be on the principle of self-government. It defines the general membership meeting as the highest organ of kolkhoz administration. The meeting must be held not less than twice monthly. It elects the Managing Board and Control Commission, ratifies production plans, budget, building plans, instructions to brigade leaders, output quotas, estimates of work days, contracts with the Machine-Tractor Station, allocations to various funds, and internal rules. The general membership meeting also has the power of expulsion of members. The Managing Board is the kolkhoz executive organ. It is elected by the general membership meeting for two years and consists of from five to nine members, depending on the size of the kolkhoz. The kolkhoz Chairman, elected by the general membership meeting for a term of two years, functions as Chairman of the Managing Board. The latter elects from among its members one or two vice-chairmen. The management is responsible for the accounting of output, labor, and money, according to the rules determined by the local and central organs of the People's Commissariat for Agriculture. The Board assigns to its members various functions of management in the economy and productive work of the kolkhoz. According to the Statute, the Managing Board allocates credits within the limits of the budget ratified by the general membership. The Chairman directs all current work; under the law, he can be removed from his post before the expiration of his term only by a court decree or by decision of the general membership meeting. The Control Commission, con-

CONSTITUTION AND ADMINISTRATION

145

sisting of three to five persons, is elected for two years. It audits cash and accounts quarterly and checks on the efficiency and legality of all work of the kolkhoz and its organs. The accountant may be selected by the Managing Board from among the kolkhoz members, or may be hired. Within the limits of the budget, the accountant manages the funds of the kolkhoz, makes deductions for stock reserves, records work days of and advances to members, keeps accounts, statistical records, etc. All expense vouchers must be countersigned by the Chairman or a vice-chainnan, and by the accountant. Thus, the Statute fairly consistently sustains the principle of kolkhoz self-government. It would be incorrect to say that the Statute is entirely disregarded. It is followed rigidly in everything relating to the duties of both the lcoll{hoz and its members. It closely regulates internal administrative and economic activities. But it is far from the reality of kolkhoz relations with the government. Here the kolkhoz functions along entirely different lines, far removed from the spirit and the principles of the Statute. Here self-government and the right of the general membership meeting to decide basic questions are, to a great extent, quite fictitious. All decisions all important questions are previously determined by State and Party organs. All important matters, such as deductions from kolkhoz funds, decentralization of labor, methods of compensation for work, etc., are decided by organs of the central government without preliminary discussion in the kolkhozes. The general membersh~p meeting is obliged to accept government decisions on all important questions. In the discussion of local and current questions, general membership meetings have a somewhat greater function, but even here the outcome is pre-determined by decisions of the Communist group in the kolkhoz. Only in recent years has the Party group been forced to consider majority opinion to some extent. The question of self-government in the kolkhoz is decisive. That real conditions fail to conform to the Statute and lack the co-operative elements which Lenin believed would stimulate

146

MANAGEMENT OF COLLECTIVE FARMS

membership activity are facts which have frequently troubled political leaders. In public speeches (26 March and 25 June 1932; 15 February 1935) Stalin has spoken of the necessity of 'leaving all decisions to the kolkhozes themselves,' 'not to substitute administrative bullying and bossing for guidance,' 'not to impose decisions on the kolkhozes,' etc. But the need to obtain from the kolkhozes foodstuffs for cities and raw materials for factories, the hostility of a considerable part of the collectivized peasantry to government policies (a result of compulsory collectivization), and the eady economic weakness of the kolkhozes created a situation in which the very speeches of Stalin and govermnent decrees violated the principle of self-government and prompted local State organs to encroach upon it further, imposing their decisions on the kolkhozes. In recent years, following the economic consolidation of the kolkhozes, the influence of members' opinions has slowly begun to increase. Self-government has begun to be realized in practice, although still in very incomplete forms. Compared to the constant struggle between the kolkhoz and the government, relations among the variolls organs within the kolkhoz are relatively unimportant. The struggle over 'one-man control,' important in the early days of Soviet factories, assumed no sharp character in the kolkhozes. It manifested itself in the struggle for leadership between the general membership meeting and the Chairman or, more often, between the Managing Board and the Chairman. In view of the co-operative theory of the kolkhoz, there could be no dispute in principle regarding the decisive role of the general membership meeting. According to the Statute, the Chairman must carry out both the law and the decisions of the meeting. In practice, however, he directs all worle, merely reporting to the Managing Board and the general membership meeting. Friction between the Chairman and the Managing Board over jurisdiction is common. In these conflicts the Chairman usually has the support of government and Party organs. The Chairman is, in fact, responsible both to government organs

CONSTITUTION AND ADMINISTRATION

147

and to the members of the collective. He must do much to organize smooth and successful functioning. He must fulfil all government demands with respect to the compulsory delivery of goods, labor duties, 'curbing individualistic tendencies,' etc. He is the first to bear the brunt of dissatisfactions of the mass of peasant members. He is held responsible for grievances and unsatisfactory results. If he yields to the pressure of the peasants among whom he must live and work, he is subject to disciplinary action by the government. If he unquestioningly fulfils all the demands of the District Soviet and of local organs of the People's Commissariat for Agriculture, regardless of the mood of the peasant mass, he provokes sharp resentment among the members and often finds himself in a situation in which productive work is utterly impossible. The Chairman must maneuver more or less successfully between the demands of the government and the needs of the kolkhoz members, in extreme cases indicating to the government the necessity of yielding to urgent peasant demands. Chairmanship is thus an extremely difficult and responsible task. It was not by accident that, in the first period of collectivization, the Chairman, when not a city worker sent by the government, or a local friend of the Party, was sometimes chosen by lot from among the kolkhoz members. In recent years, as the kolkhozes have become economically stronger and as their relations with the government have been relatively stabilized on the basis of definite if exacting law, kolkhozes have begun to produce personalities capable of leadership. At the same time, the functions of the Chairman have become considerably easier and have begun to resemble the usual ones of a manager of an economic enterprise.

XII

Organization of Work HE most important and complex problem of kolkhoz management is the organization of work. This reflects all the social and economic peculiarities of the kolkhoz form of agriculture. The tendency of development has been away from an initial centralization toward increasing decentralization. At the outset, 'full collectivization' prevailed and, until about 193 I, the policy was to centralize administration of land cultivation, animal husbandry, etc., in the hands of the kolkhoz Chairman. All work was conducted under his direction, and workers were transferred from one task to another as work might require. Individuals were attached to no specific task. Work animals and implements went from hand to hand as assignments changed. This system was attributed to the weakness of the administrative apparatus, to government distrust of the majority of kolkhoz members, and to the shortage of capable personnel. The tendency toward centralization was, moreover, an effort to counteract attempts of peasants to preserve in disguised forms remnants of individual farming. In many kolkhozes, collective fields were divided into small plots and entrusted to groups of members for cultivation. Thus peasant families contrived to hold and work their old land. Similarly, collectivized implements and animals were assigned to groups composed of their former OWllers. Sometimes there were also concealed forms of land rental, hiring of labor, fictitious work-day records, etc. In its struggle against such deviations, the government tried centralizing the direction of work in the hands of Managing Boards, who could be easily checked on.

T

ORGANIZATION OF WORK

149 It soon became clear, however, that the centralized method of organizing work produced negative results. Management was superficial, workers were constantly shifted from task to task, no individual or group was responsible for a definite cycle of work (e.g. plowing, sowing, harvesting), work became impersonal, and it was impossible to encourage conscientious and efficient performance. In 193 I many kolkhozes began dividing their membership into brigades for land cultivation, animal husbandry, etc. The results were encouraging. The decree of 4 Febnlary 1932 ordered decentralization of management, thus formally recognizing the brigade system. 'Instead of working in a crowd, kolkhozes were broken into smaller brigades of permanent composition and with definite tasks.' 1 The brigade principle was taken over in the Statllte of 1935. Today the brigade is the basic unit in the kolkhoz system. Selection of members is by brigade leaders appointed by the Managing Board and subject to its approval. The. composition of a brigade is fixed for the period of its task, usually the duration of the agricultural cycle (i.e. a crop year, the period required for breeding stock, and the like). The average brigade consists of thirty to sixty persons, depending on the crop and specialization. Brigades are further subdivided into squads. Brigades and squads are assigned to definite tasks, usually consisting of related agricultural processes, such as plowing, sowing and harvesting a given sector, increasing a herd of cows by 30 per cent, preparing several thousand tiles. The brigade is assigned a specified tract of farm land, a group of work animals and tools, or a herd, tract of meadow, and fodder. Brigades and squads are responsible for property entrusted to them and the quality of work performed. The Managing Board assigns brigade tasks annually. Stock-breeding, raising poultry or rabbits, and other auxiliary enterprises (flour mills, drying plants, brickyards, etc.), are also 1 Yalcovlev, director of the agricultural department of the Central Committee of the Communist Party, in lzvestiya, 5 February 193%.

ISO

MANAGEMENT OF COLLECTIVE FARMS

carried out by brigades and squads. The managers of such enterprises may be appointed from among kolkhoz members or may be hired specialists. The role of the brigade leader is extremely responsible. He selects the staff of the hrigade and manages its sector of the economy. He allocates work within the brigade, maintains discipline, is responsible for quality of performance, keeps the record of work days and other primary data m;eded for cost accounting. He is responsible to the kolkhoz Chairman for results. 'The new structure of the kolkhoz provides for direct contact between the kolkhoz Chairman, who daily supervises the entire kolkhoz economy, and the brigade leader;' 2 Brigade leaders, according to law, are appointed by the Managing Board for a term of two to three years. A leader may be removed only with the approval of the local organ of the People's Commissariat for Agriculture or the Machine-Tractor Station. There has been a long struggle against attempts of kolkhoz members to evade work in the kolkhoz. In 1932 and 1933 over 50 per cent of the members did less than 30 days of kolkhoz work annually. The Second Congress of kolkhoz shock brigaders (1935) decreed, as a condition of membership, that each ableftbodied person show a minimum record of 50 work days annually. In 1939 the minimum was raised to 60, 80 and 100 work days, depending on the region and the basic specialization of the kolkhoz. 8 A 1937 study showed that, on the average, kolkhoz members worked for the kolkhoz 46.6 per cent of their working-time. The rest was spent on private holdings, in crafts, markets, transportation, etc. During recent years the number of working days per kolkhoz member has increased.
n., 112 n., 130 n" IJ2, '34 n., 137 n., 150 n., 181 n.

Central Trade Union Council, 35, 37, 40, 4S 1Z., 9 2 n. Chairman of Managing Board (lwIkhozes), xxvii, 144-7, 148, ISO, 153, 156, 16z, 167, 168, 169. 181-2

Chelyabinsk provinc:e, 20 Chumandrin, Mil,hail, IIS Ciliga. A., IIgn. ISg

INDEX Civil War, 3, 6n., 27, 29,67, 69, 103, 104, lIS; see also Revolution Collective contracts, 38, 40-41 Collective farms (l:olkhozes), xiii, xvi, xviii, 40, 60, 185; see also under Constitution and administration of . . . , Development of ..• , Incomes and incentives in ••• , Officials of .•. , Organization and work of . . . , Planning and accounting in . . ., Private vs. co-operative farm interests, Relation of collective farms to !l'0vernment and other organizatIOns, Statutes for kol1chozes 'Collectivization of Agriculture in the U.S.S.R.,' 127 n. Colleges, see Education, Engineering colleges Combines, see Kombinats Committees (Local, District, City, Regional), 18, 19, 21, 22., 23-6, 40, 147, 156, 159, 161, 180; see also Provincial Committees Communes, agricultural, 129, 130 f., 135 Communist Party, xi, xvii, xviii, xxix; and industrial management, U-14, 17-3I; membership, 17, 25-6, 28-9, 91, 102 f.; guidance of, in practice, 22-6; as workers' party, 28-30; plans economic activity, 47-57; election campaign, 123 Communist Youth League, see Young Communist League 'Composition of the Cadres of Engineers,' 109 n. Conferences, x, 9, II, 12, 21, 30, 64, 75 n., 76 n. Congresses of the Communist Party (6th), II 2 n.; (7th), 112 n.; (12th), 8r; (14th), 44; (15th), 55 n.; (16th), 14, 55; (17th ), 7, 17, 18, 28-9, 43 n" 53, 179; (18th), xxvii, II, 17n., 18-19, 20, 21, 28-9, 51, 55, 56, 73 n., 101 n., I12 n., 162 n. Constituent Republics, 4, 5-6, 39, 49, 51, 52 n" 161 Constitution and administration of collective farms, 140-47

Constitution of the U.S.S.R., 17, 55 Contests between workers, 74 Control (yedino-natchaliye) , 6 n., 13, 19, 27, 32, 35-6, 146; dcfined, ix, 186 'Control by the Rouble,' ix, 87-90, 162 Control Commission (of kolkhozes), 144 Co-operatives, 52, 59, 60, 61, 87, 89, 128, 157 Cost of Production and the Problems of Price Structure, 74 n, Costs, production, xix, xxi, xxii, 53, 54, 60, 69-78; reduction of, 72-4; overhead and sinking fund, 77-8 Council of Labor and Defcnse, 6 n. Council of Peoples' Commissars, 63,7 0 , 79 n ., 38 n., 39, 47,48 ,49, 88, lU, 123, 139n,) 14.2, 154, ISS Councils (Soviets) of Workers and Peasants, 3, 4 Country of Socialism, Tbe, 30, 102 n. Credentials Commissions, 28, 29 Cultural Constntction in tbe U.S.S,R., IIO n., I II n., I I2 n.

sr,

Decrees: 22 Feb. '21,47 n. 27 July '28, 106 n, 29 Aug. '28, 106 n. 28 Dcc. '29, 160 n, 30 Jan, '30, 88 I Mar. '30, 140 n. 3 Apr. '30, 163 n. 14 Jan. '31,90 n. 13 Sept, '31, 38n. 4 Feb. '32, r,p n" 149 10 May '32, 141 n, 25 June '32, 141 n. 19 Sept. '32, 7 1 I Mar. '33, 164 n. II Mar. '33, 9412, 10 Sept. '33, 168 n, 19 Dcc. '33, 61 4 Mar. '34, 159 n. 4 Apr. '34, 153 n. 17 Feb. '35, 141 n, 19 Dec. '35, 142 n. ;I. Mar. '36, 82. n, 19 Apr. '36, 79 n.

INDEX

Decrees: (Cont.) 31 Dcc. '36, 79 n. 2,3 Nov. '37, 6 n. 8 Jan. '38, 7S n. z Feb. '3 8, 47 n., 48 3 June '3 8, 63, 65 21 July '3 S, 39 27 May '39, 150 n. IS Mar. '40, 155 n. 6 Apr. '40, "56 15 Apr. '40, 6 n. 10 July '40, 69 .% Ocr. '40, 122 n., 176 n. I2 Oct. '40, 12 2, n. 31 Dcc. '40, 165 n. 7 Jan. '41, 51· n. 30 Dcc. '41, 42 n. Demyanovich, A., 64 'Depersonalization,' 18- 1 9, 165 Development of collective farms, 127-39 Development of Soviet Economy, 135 1~.

Dickinson, H. D., xxiii n. Diesel, Russki, 92 n. Directives, Purty, 33, 37, 47, 4S, 49, SO-5 1 , 53, 55 District Soviet Executive Committces, 152, 154-56, 159, 160, 168, IS6 Divisions, Territorial, see Territorial Divisions Dnepr dam, 8, II4, 116, 119 Dnepropetrovsk, 2,4 Donbas coal mines, 14, IS, lO, 93, lOS Draft of the Second Five Year Plan, 51 Dvinsky,64 D'yachenko, V., S3 n. 'Dying out of Trade Unions,' 43 n.

Econometrica, xxiii n. Economic Councils, 3, 4; see also Economsoviet, Supreme Council of National Economy Economic Institute of the Academy of Sciences, 13 n., 19 n., 73 n., 84, 135 n. Economic Life, 131 n., 187 Economic officials, 27, 2S, 1°4, 109, , ISS; see also Officials

Economic Review, 109 n., 173 n., 187 Economic Soviet, see Economsoviet Economic System in a Socialist State, xxiii n. Economic Theory of Socialism, xxiii n. Economics lind Socialism, xxiii n. 'Economics of Production and Qualio/ Indicators,' 69 n. EconomIcs of Socialist Industry, 13 n., 19n., 73 n., 74 n., 79n" 84 n., 85 n . Economics of Soviet Agriculture, 174 Economist, 139 Ecollomsoviet, 6, 9, 41, 58, 59 Education, xxviii, 106-12, IlI-3, ISS

n.

Ehrcnbllrg, I., 102, 114, I IS Emblem of Honor, 96 Employees, see Management and employees Energy, II4, n6, 1I9 Engineering Colleges, 110 Engineers, xxvii, 30, 96-104 passim; trial of, 105, r07, 109 n., lIO, II6, lIS, II9n., 123

n.,

Enterprise, 9S 187 Enterprises, see Plants Experiment of Bolshevism, xxix n. Feiler, Arthur, xxix Finances tlnd Socialist Economy, 89, IS7

Finances of the U.S.S.R., 83 Five Year Plan for the Development of the National Economy, 72'11., 84 '11., IIO n., 134 n. Five Year Plan, First, 48, SO, 51, 55, 71 , 72 , 73, 75, 85, to7, IIO, IIS, 1I6, II7, II9, 133-4, ISS; Second •.. , 50, p, 62, 7 2 , 73, 75, Ss; Third ••. , 51, 56, 72 73, 74, 75, SS, 162; see also Plan For Industrialization, 40 n., 68 '11., S8 n., 187; see also Industry 'Functional system,' 14 f. 'Funded' commodities, 58 ff. Funds: capital, 95; managers', 95;

n.,

INDEX

sinking, 72, 77-3,79, 80, 84; wages, 53 'Further Improvement of Planning,'

s6n. Gaposhldn and Abalmmov, 63 n. 'General Welfare in Relation to Problems of Taxation ... " xxiii n. Georgia, 137 ' Ginsburg, L., 61 n. Gladkov, Fedor, 113-14 Glavarambit, 92 n. Glavks, 3, 4, 7, 9- II, 13, 19, 20, 49, 50-51, 53, 54, 58, 59, 60, 6r, 62, 64, 65, 70, 71, 91, JIO n.; defined, 187

Glavsbyt, see Main Sales Boards Glavsnab, see Main Procurement Board Gnedin, Nikolai, 98 Gorfinkel, J., 63 n. Gorki (Nizhni-Novgorod) plant, 25, 37 Gosplan (State Planning Commission), 5, 39, 47-57, 58 f·, 7 2 n., 74, 75, 84

n.,

134

n., 137 n.,

180, 185

Gosplan Statutes (1938), 47, 48, 51 Government farms, see State-owned farms GPU agents, 119 Grain Market, The, 131 n. Great Conveyer, The, 114, 115-16, II7, lIS

'Great Fergana Canal is Completed,' 169n.

Grinko, 88 Guberniya, x; abolished, 3 GUdOV,29

Hall, R. L., xxiii n. Hammer and Siclde Works, see Sickle and Hammer Works Hiring labor, 38-40 Hitch, Charles,' xxiii n. Hitler, Adolf, 138 n. Hotelling, Harold, xxiii n. Hubbard, L. E., 174 li'in, Yakov, 97

n.,

II41Z.

Incentives, advancement, and re-

muneration in industry, 91-5; intangibles, 95-103 Incomes and incentives in collective farms: income, 163-9; intangible incentives, 169-71 Industrial banks, 89 Industrial Boards, Main, see Glavks Industrial management and the Communist Party, 17-3Ij Party in economic control, 17-lZ; Party guidance, 2z-6; background of, 26-31 Industrial Statistics, 8 n., 67 n. Industry, use of word defined, 3 n.; see Management in industry Industry, 63 n., 71, 9 z, 93 n., 94 n., 95 n., 97, 98 n., 99 n., 100 n., 101, 103 n., 187; see also For Industrialization Intangibles, see Incentives, advance~ ment, and remuneration; Incomes and incentives ..• Intelli~entsia, ..xxvi; composition of SOVICt, XXVll, 107, 109, lIz n.,· see also Literature International Labor Review, 127 n. Introduction to Economic Analysis and Policy, xxiii n. Iron and Coal Trades Review, 74 n. Izvestiya, 100 n., 123 n., 139 n., 155 n., r66n.

Joffe, Y., 74 n. Kaganovich, L. M., 14 153

n.

n.,

17, rOI,

Kallistov, A., 101 Karbyurator, 92 n. Karp, S., 52 Katayev, Valentin, II4 Kharkov. 24.69 Kheinman, S., 75 n., 76 n., r09 n. Khozraschet, see Accountability, business Kbozyain, lIS Khozyaistvenniks, see Economic Officials Khrushchov, 113, 156, 166 Kirov, S. M., 53 Kirov Works, 25 71 , 74 Klekovn, Marusya, 99

n.,

INDEX

Koelnischc Zeitung, 138 r. Kotk/Joz, see Collective farms Kol1